Do you want to become a successful trader? Do you really believe trading is the right profession for you? If so, you will have to do lots of hard work to learn more about this market. Education is the most important thing in the currency trading industry. If you don’t develop your skills, you will never be able to develop a perfect trading strategy. Crafting a trading system from scratch requires a high level of passion. Before you start using a system, you need to back-test the system in demo accounts to find faults. Those who buy other people’s trading systems can never make real progress in the retail trading industry. They always lose money since their trading strategy is not synchronized with their personality. In today’s article, we will learn the proper way to develop a perfect system from scratch.
Learn about your personality
You need to know yourself very well to become a profitable trader. Those who love a quick profit can never become a successful trader with a long-term trading strategy. Similarly, those who love to earn quick money should choose a scalping trading system. Your trading system should be based on your personality. So, spend some time assessing your personality.
Learn more about your key requirements and you will be able to develop your skill within a very short period of time.
Using the demo accounts
Demo accounts are nothing but blessings for the new traders. It allows them to master the art of trading without losing any real money. Many professional UK traders still use the demo accounts to fine tune their trading strategy. When you demo trade the market, you can easily lose trade without ruining your investment. Try different trading strategies in the demo accounts and see which suits you the best. Stop thinking about short-term gain. As a Forex trader, you should be always aware of the long-term consequence.
We all know practice makes a man perfect. During the development of your trading strategy, you should also learn about the fx trading platforms. Unless you know the proper use of advanced trading tools in your platform it will be very hard for you to do perfect market analysis. For instance, many retail traders don’t know the proper way to ride the long-term trend. Those who know the use of Fibonacci retracement tools can easily execute a trade at 50% or 61.8% retracement level.
Maintaining a trading journal
During your demo trading period, you should maintain a trading journal. Some of you might say, maintaining a trading journal is not required unless you trade with real money.
Always write down the details of each trade transaction to help you become a profitable trader.
But you need to understand the fact that demo trading accounts offer you the perfect learning platform. You will make lots of mistakes and if you don’t write down the details of each trade, learning from your mistakes will be very hard. You need to polish your trading strategy based on your past trade result. So always write down the details of each trade to become a profitable trader.
Using the candlestick pattern
No matter which trading strategy you follow, always remember to use the candlestick pattern. The use of the Japanese candlestick is one of the best ways to set predefined stop loss to your trade. In a sense, you can dramatically reduce the risk factors by using the Japanese candlestick. Price action trading is just a part of a different Forex trading strategy. You might be a trend trader but still, you should use the price action confirmation signal. Those who scalp the market might have some difficulty in finding the reliable signals but doing multiple time frame analysis you can easily eliminate this problem. Always remember, trading is all about risk management. The price action traders are always ahead when it comes to quality trade execution.