Becoming consistent as a currency trader
If you are reading this article, you can consider yourself lucky. Lucky to have stumbled onto one of the few legitimate sites that talk candidly about how to become a consistent trader.
Let’s go ahead now and address what many people don’t realize until it’s too late: trading is hard. Like really, really hard. Anyone who tells you otherwise is either trying to sell you something or is just plain naive.
Luckily though, there are people like us who do want to learn how to trade currencies. So if that’s your cup of tea, I suggest we continue. We will attempt to make sense out of what seems like a very hopeless endeavour and turn it into an achievable goal- becoming at least somewhat consistent in our currency trading.
Rules everyone should follow
We first need to begin with some plan or routine, especially regarding money management. Here are some classic rules everyone should follow:
- Never risk more than 1% of your capital per trade
- Never risk more than 2% of your capital in a single week
- Never hold a position overnight that exceeds 4% of your current account size
While these rules may seem unattainable at first, they are all doable. So how do we meet these requirements? Many different strategies will allow you to accomplish this, such as cutting your losses quickly and scaling into trades with short positions. It is not an extensive list by any means, but it does give us something to start with.
Now that we have our goals set up for success, let’s talk about making them happen consistently. The best way to achieve consistency is by doing things the same way every time to know what to expect each time, and so your body does not have a chance to fail you.
For this reason alone, I highly recommend trading from the exact location each day. If, for whatever reason, that isn’t possible, then at the very least, make sure that you are using the same equipment each time.
Manage your emotions effectively
The next thing we want to learn is how to manage our emotions effectively. Many new currency traders make the mistake of getting too excited when they start making money, only to lose it all back again because they were over-trading. It’s a classic case of greed taking control and usually results in complete financial ruin.
The best way to avoid this is by learning how emotional responses work and fighting them every step of the way when you feel like you can’t take any more of a specific trade. The morning star candlestick formation is a great way to determine the probable outcome of the next trading day and help with money management and emotional control.
Trading consistently over time
The final (and most important) step in becoming consistent as a currency trader is being consistent. It means trading consistently over time, not just one day. So if your goal is to earn $100 each day, then do it every single day without fail- no excuses!
If that was easy for you, then try raising the stakes. To achieve consistency at its highest level, consider either going all-in on a particular strategy by putting everything into your trading account or cutting back drastically on expenses to have more leeway in your trading.
Of course, the idea behind all of this is to make currency trading an integral part of your daily life. If you are not consistent in this, you will never be able to succeed at it. The great thing about currency trading, though, is that even small profits add up over time to become powerful results, so everything starts little by little together.
So if you’ve made it this far, know that you are already on the path towards becoming consistent as a currency trader- good luck!