Do you know the top priority of traders? It is preparing the strategy. Many people will argue that their topmost priority is to plan a risk management method but without having a solid game plan, there is no sense in investing money into the live market. The risk management comes after preparing a strategy. In this article, we are going to talk about one very important feature of becoming a successful trader. That is, how to plan for and follow an appropriate investment method. Remember, this is a very long process, and it is not possible to pinpoint every detail in one article. Still, we will provide guidance that can be used as a reference in future development of plans. Make sure you know the market better and have adequate knowledge about the trends.
Firstly, Select the Currency Pair
This is the first rule that is often overlooked. The chosen currency pair plays a key role in profit management. If the wrong pair is selected, the plan will not work out as expected. Again, if a minor pair is selected and traded with a major pair formula, this will also result in pain. Be sure to choose the trading currency pairs based on your expertise and knowledge. Do not depend on professionals as they also follow the same technique. If your confusion persists, practice in a demo account to get an idea. It will tell where more work is needed in order to predict the trend correctly. We advise going with the major pairs as information is available about them. Moreover, they all have a dollar and as a result, the price is relatively stable compared to the others. Choppy trends are risky and can cost you your capital.
Secondly, decide the timeframe
Are you going to be a scalper or a long-term trader? This is a vital question that many investors overlook. There are two major forms of trading in this industry. The long-term method and the short-term technique. Every method has its perks and drawbacks, but for beginners, it is better to invest in a higher timeframe. Moreover, a higher timeframe provides an overall picture of the market trends. Experts and scalpers are the highest risk-takers and they significantly endanger their capital in every trades. It requires precision and in-depth knowledge to scalp or even understands the complexities in such a short timeframe. The solution is to opt for a higher window.
If you are not sure how to do the things, use the Forex trading software and see how things work. It’s like using the demo account to develop your skills. Those who feel uncomfortable with the demo account can go for the simulation software. But no matter which solution you choose, you need to know importance of the selecting of time frame to become a good trader. If you fail to use this technique in an effective way, it will be tough to make money in the real market.
Thirdly, choose from a wide range of techniques
Never limit yourself to the opportunities that arise in the market. No-one has any idea which technique will suit them best. Sometimes people trade for years and quit ultimately only to find out later the other technique was more suitable for him. Try every technique that is available based on the first two choices and select the appropriate one. One thing to keep in mind is, never focus on the profit. Focus on consistency.
Finally, start making it better every day
This is the hardest part of becoming a trader. As this sector evolves continuously, investors need to keep up their game every time they place a trade. Open a demo account and let the imaginations go wild. Practice with different indicators, trends and patterns, and try to make it better than the last time.