We have seen forex traders repeating their own mistakes thereby losing the money incessantly. Thus, there are some crucial questions to ask yourself before placing new orders to help you to win the trade as well. Let us perceive those 10 questions we need to ask ourselves before placing the next trade.
1. No guarantee for profit at all, is that okay with me?
While trading in forex, no one can guarantee 100% profit at all and if anyone says so, it means he is simply lying to you. Thus, there is always some chances of loss with any kind of strategies that you follow regardless of taking expert advice as well. If you do not make up with the expected loss then it is advised to leave forex trading and look for other options.
2. Am I really ready with my risk and reward ratio?
There is a risk and reward ratio for each trade and it may be like 1:3 proportion. Therefore, we must be ready to accept both profit and loss. It avoids all the capital from risk at a time. If you think risk and reward proportion is reasonable and tolerable, then you are fine for forex trading up to a certain extent.
3. Is there enough fund in the account in the case of an adverse situation?
Due to lack of funds, many times the traders have to close their open positions, although there are chances that the market may turn into their favor after a certain level of price and if there is sufficient fund in the trading account then such intricacy may be circumvented. If the answer to the question is yes then hopefully it will provide positive signs for forex trading.
4. Will I control my emotion during the trade?
Yes, this is one of the unavoidable circumstances which will come while trading. It may deviate the preplanned and calculated decision which ultimately results in loss of the trade in the form of low profit, loss or even heavy losses.
5. Am I ready with the trading plan?
To be successful in the forex trading, there should be a tested plan and a road map on how to execute the orders and how to settle the orders. If you have and you know all aspects, then it is a good sign for a better results. There should be no confusion with the plan and it must be systematically arranged.
6. Do I really know about the technical aspects of trading?
While choosing the forex business, you must be aware of the jargon of forex so that if anything goes wrong while trading you must have a clear picture for prompt actions, like call margin, software features and other trade-related lexis. If you are confident that you have got all the required information, then it will be an added value to your forex trading.
7. Am I confident with my trading setups?
Trading setup is the foremost step before starting forex trading as it leads your account to add the fund or to debit the fund. Therefore, you must have a very logical, proven and self-tested plan. If you are self-assertive to the strategies then you are quite ready for your currency trading.
8. Have I calculated the brokerage fees, spreads, swap charge and all other charges which impact the P/L account?
This question must be asked to judge whether your preparation has been understandably done or not. There is some cost involved in currency trading that needs to be checked which influences the total trading account because total expenses much are deducted from your profit and then only actual profit is realized.
9. Do I have all required contact details?
All the contact numbers, emails and social media details needs to be noted down as it might be required any time during the trading session. Any urgent matter may come up and such contact details help you to sort out the problem within time. If you think that you are well-equipped with such details then you are qualifying the next trade.
10. Will calculated loss hamper my personal life badly?
This is the last but is equally and even more essential question to be answered by you and if your answer is yes then you are considered to be fully prepared for currency trading. Such trading loss must not hamper your personal social life that’s why it is always advisable to trade only on the amount you are capable to manage.
The above questions, when you ask yourself and get the answers positive then it may provide good assistance to you for forex trade and if you get the answers negative then you will have to rectify yourself or look for other available options. Forex trading involves great risk and we must be well aware before entering in such trading and have proper skills for the same.