Becoming a trader is not an easy job. People start making silly mistakes because they don’t pay any attention to important rules. But to be your own boss means you need to trade the market within the confines of somedefinite rules. If you look at the success rate of retail traders, you will find only 3-4% of them are successful. So, how do we become a part of the successful trader’s community? Well, there is no specific answer but you can follow some advanced tips mentioned in this article.
A Day traders’ life
Day traders mainly invest their money only for a day. They don’t work like active traders who hold their position for the next day. Day traders make their transactions in the morning and close them on that same night. They use leverage, pip value to increase their profit.
1. Evaluate yourself
Judge yourself to figure out whether you are a perfect trader or not. In trading, you must spend lots of time analyzing charts, mathematical terms, and records. Only then can you find reliable trade signals.
The right mentality is also required for becoming a profitable trader. It would be best if you keep learning every moment. Train yourself to take risks or losses in FX. You can look at some books such as ‘Trade Your Way to Financial Freedom’ by Van K. Tharp, and ‘The Psychology of Trading’ by Brett N. Steenbargerto enhance your knowledge.
2. Have a look at the bank balance
Accessible capital is essential for this market. If you don’t have enough money, don’t come to this marketplace. In the trading business, losing is a part of daily life. You may see the face of profit on the 11th or 12th trade of the time. As Van K.Tharp said, “Entering the trading world with only a small amount of money is a sure path to failure.” He also recommends having at least $100,000 for trading.
3. Proper understanding of the markets
Every day trader must have strong knowledge about the market. Learn more about the day trading profession by using the free resources at Saxo so that you can manage the trades in a better way. To help improve your understanding, you might choose to use the demo account for a few months.
4. Checking proper security of FX Platform
Before putting all money into the specific FX platform, research them—their availability, leverage value, pip value. Otherwise, you will lose all capital. Choose a good broker to avoid technical difficulties. You might be thinking that a low-end brokers can offer you the perfect environment but this is not all true. If this was so, the professional would never have traded with the high-end brokers. So, be careful when choosing a broker.
5. Setting up trade strategy
There are lots of trading strategies in the FX market right now. But as a newcomer, you should have at least two approaches to gain a place in this marketplace. The changing market is very dynamic. There are some steps you should consider while planning.
- How will you implement the strategy?
- How much investment is going to be used?
- The number of trades is going to be placed.
- How can you identify the approximate profit value?
6. Practice money for trade strategy
As a trader, you should test the success rate of your chosen strategy. Say you have $5,000. Then you spend this amount of money trading and have a success rate of 70%. But remember, you have to be prepared to deal with losing trades, and only then you can withstand the challenges you will face in trading.
7. Start small, then expand
At first, invest a tiny amount of money so that you can gain experience without exposing yourself to high risk. Experience will make more and more stable in that market. As you become more comfortable with your approach, you may start trading the market with big capital.
Day Traders are commonly the big community in the FX market. Entering and exiting is accessible here. But most successful Forex investorsstarted out as day traders. So, follow the tips, and who knows, anyone can become the next person to succeed in that market.