Trading success is a continuous manner of having more number of winning trade than the failure of a trade. Forex trading is considered as one of the highly volatile, leveraged and liquid market which basically attracts both opportunities as well as threat and this depends upon the type of order and movement of the price direction. This is to say that if the market is bullish and order is buy then account will be added with more money and similarly, it is true to sell order with the bearish trend. However, if orders are lying against the trending market then there would be a loss of capital as well. We may comprehend following way out for setting up ourselves for trading success.
Choose any well-known pair
There are several pair currencies to trade like major currency, cross currency. You need to choose one of them which really suits our capital margin and investment plan. Few pairs are too volatile and may create high profit or high loss also thus, great care must be taken while choosing the currency pair as it will decide the rest of the phenomenon for trading. You may refer any expert who has been trading and has abundant knowledge.
Get details about the pair
After selecting any pair then, you must collect all the possible information about the particular pair through blogs, experts, friends, books etc. You should have enough acquaintance before making any trade strategies and such facts help for veracious decision. Total volumes per month, weekly and monthly trends, similar pair and antagonistic pairs are few essential information.
Get price drivers
This step is really more significant and trader must emphasize as much as possible to learn very well since, they need to have an idea why the price is moving up, down or sideways. There is always a reason for such drift and these reasons may be economic news or technical break-out hence, all the fundamentals should be noted, studied and analyzed to find the positive or negative impact over the currency pair.
Make a plan
Failing to plan is actually planning to fail and this seems very true in case of FX trading also. We need to create proper strategies from execution, to the settlement of orders and for that there should be a properly calculated execution price, settlement price in the form of Take Profit (TP) or Stop Loss (SL). Additionally, there should be a predefined risk & reward ratio, risk aversion mechanism and cost of trade.
Backtesting
To fail and learn in the demo is better than to lose fund in a live trading account, consequently, we need to test all the strategies again and again in simulated TWS (Trader Work Station). After getting proper confirmation of our approaches, we can concoct ourselves for a live account. Even expert’s strategies are required to examine before implementing in real account.
Execution
Traders may execute their orders after final approval of repeated tests of stratagems and may track the records of all trade happening, regarding price trigger, volatility and emotional challenges during the full trading session. After this step, there may be profit, loss or break-even amount and this will help for building the confidence or learning the new things.
Analysis of causes and effect
Ultimately, we need to analyze the account for profit or loss. If there is profit then it needs to be verified that you haven’t used any factor more than the prescribed plan which has impacted this or not. Similarly, if there is a loss then we must introspect the causes and need to spot it, to improve in next trading session. In fact, this will assist us to refine our overall trade set up.
Above discussion may bring the higher chances of winning forex trades. However, there is no perfect methodology to win every time in a guaranteed way since the forex market cannot be controlled by a single market. Therefore, we need to develop our own technique to carry out the currency trading by taking reference from the above paragraphs or any other expert's suggestion.