There is no set formula for trading successfully. However, success in your trades depends to a great extent on proper analysis and implementation. Because of FX trading’s easy accessibility and popular appeal-24/5 sessions, leverage and low cost your profit potential is unlimited. However, you can also lose money very fast by trading forex with one miscalculated or wrong move. Let's take a look at 5 factors why your constant practice in forex trading is not effective:
1.Not Treating Trading as a Business: You should treat forex trading as merely another business. Just as any business has its own share of risk, uncertainty, ups and downs, gains and losses-these things are a part and parcel in forex trading too. Thus, you should totally curb your emotions and approach your trades with a clear & focused mindset. Also, remember you cannot become successful overnight. Unless you do this you cannot put your best foot forward.
2.Lack of a Trading Plan: You need a blueprint to script your forex trading success. Most traders choose to ignore this and continue trading without any proper planning or strategy. As a result they end up decimating their account and making costly trading mistakes which dents their self-confidence too.
3.Improper Analysis of the Markets: Remember trading is not like gambling in a casino. If the trades you enter are not worth the money you are risking and there is no favourable set up restrain yourself & live to trade another day. By wrongly analysing charts, making faulty moves and forcing trades when it's best to stay out will only reduce your trading career to shambles. Execute your trades only when you are sure about them.
4.Wrong Approach: In trading timing is everything. Being consistently profitable requires time. Choose instruments and time-frames that you are comfortable trading in. It is up to you whether you want to be a scalper or day trader, whether you want to base your trades on simple support and resistance or technical indicators like MACD, crossovers etc. Once you decide upon a methodology test it on a variety of time-frames, instruments etc. If it is effective fifty per cent of the time chances are that it is an effective strategy and will give you a winning edge. Otherwise change it.
5.Inadequate Risk Control: Risk management is inevitable for survival in the markets. Curb losses quickly and often, if required. Try to veer your trade in the right direction before it becomes unmanageable and your losses are magnified. With adequate patience and iron discipline you can trail your stops, use stop losses and be profitable at best, or break even at worst.
Concluding Summary: If your trades do not deliver the desired results once you switch from virtual to live trading then pause and review your methods. Rework your strategies, see what's hindering your progress and take on the markets once again after the necessary course correction. Your efforts will surely be fruitful.