Five Ways to Be More Profitable In Forex

Forex can be a daunting place especially for newbies. It is full of many promises and possibilities, yet is still one of the many places people jump in before they actually realize what they are doing. This article is for those that are struggling and I will share 5 ways which I use myself in order to be more profitable in this business.

First off before I begin with my list, I wanted to first share that not only can one lose money in Forex, but one can also make a lot of money as well. That choice is up to the individual and their own mindset. The myth that is portrayed often by many is that Forex is a scam or is the same as gambling is not a fair judgement and Is a claim made by people that do not know how to trade. The truth is trading is a skill just like any other skill.

Whole businesses have been formed over it and benefited from it including banks and investment firms.

Five Ways to Be More Profitable in Forex:

  1. Learn your price action based strategy well, emphasis on the word your. Each of us has different methods of how we assess the market exactly and each one can be profitable. In order to learn your method well, one must back test that strategy over at least 10 or more years on all the time frames and currency pairs that they use. This can be done by the use of a back testing program or done manually with mt4 or similar. Once you become confident after 10 years of back testing that your strategy is profitable, then you will be ready to trade. Before then without back testing, all you will be doing is throwing money away..
  2. Learn candle stick price action. This is a must for all traders. This will help give a better insight into what the candles are saying and thus improve profitable. Two candle patterns to learn that I recommend are pin bars and engulfing candles.
  3. Learn the power of structure, the market always follows structure, so learn it, this needs to obeyed in all strategies. By knowing these areas to watch you will be much more profitable..
  4. Pay attention to Risk Reward in your trading. If the risk is more than the reward potential then do not trade. If the reward is better and lines up with your strategy then and only then trade. Patience is key in this business.
  5. The last important step is money management. What this means is risk per trade what you are happy to lose, we all have different levels here, however I find 1% to 2% risk is good amount to keep under depending on account size. Say you are risking 1% on a 3 to 1 one trade this means if the trade is successful you will make 3% on your account and if you lose on that trade you will lose only 1%. Losing some trades is part of trading and to except that is part of money management, so keep to your plan here.

Other than the steps above, some other aspects as a trader people can look at is to look at other traders that are profitable. I highly recommend this. Other traders that have been there and put in the time. This is extremely helpful and part of any learning process.

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