By: Charley Warady
This might come as bad tidings to some, but you'd find out sooner or later anyway; the key to successful Forex trading is to treat it as a business. It isn't a get rich quick scheme, it's not gambling, and it's not easy. It's a business.
Like all businesses, in Forex trading you must have a business plan and it can't be, “make a ton of money”. That plan rarely leads to successful Forex trading. There is nary a business around whose business plan involves losing a ton of money, so the opposite is not quite good enough.
Anyone that has ever opened a business knows there must be a business plan. Any start-up company looking for venture capital investors; the first thing they want to see is a detailed business plan before they dole out the much coveted seed money. Successful Forex trading is no different. You need a business plan; a trading plan. And even more important than having the plan, is sticking to it.
What kind of plan
It doesn't really matter what kind of plan it is; as long as it is written down and carefully studied. There are many established plans out there for you to use, or you can make your own. But be sure to try it out in a demo account before you throw your real money behind it. Do not try out the plan for just a week or two and then go full tilt.
Be fair to yourself. Try it out in a Forex demo account provided by your Forex broker for at least a month or two. Successful Forex trading is a business you're going to be in for a long time. Any business that is rushed into is doomed to failure; particularly in the Forex market.
Write things down. Make notes as to what trades you're making and why you're making them. Oftentimes, you'll see that some trades you made were based on things you wanted to see as opposed to points and lines that were actually on the chart. It helps to look backward as well as forward in successful Forex trading.
Stick to the plan. All your trades are not going to be profits. Get over it. If you get angry and try to teach the Forex market a lesson, you will find yourself learning something. How to flip burgers and asking if they want fries with that.
Discipline is the plan
Discipline is the key. It may not always be exciting, but it leads to longevity. It doesn't matter what currency pair you choose to trade or even how many currency pairs you choose to trade. The plan is the main thing and it needs to be hashed out, practiced, and proved before your first real Forex trade hits the market.
There's no hurry. There is always money to be made in Forex. It's the traders with the plans that will consistently make that money. A successful Forex trading strategy has to begin somewhere. Before you pour over your charts and brush up on the fundamentals, make sure your plan is solid.