I heard this saying a few years ago: “If you have to ask you shouldn’t be trading”
And I thought to myself, wow, that’s such a simple, yet powerful statement!

Think about it. If you had a reliable, trading system that consistently got you trading profits, would you EVER have to ask anyone else’s opinion? Would you have to ask anyone questions about trading?

You see, too many traders today are asking question after question without bothering to find out the answers for themselves. These people scour online forums and websites, asking questions about trading and waiting for someone to provide a quick reply. And in the end, these people don’t really learn anything except how to confuse themselves.

There are not many people in the World that actually make money in Forex trading. However among these profitable traders, there are a variety of different trading methodologies that they use. It is thus important for a new trader to first choose the type of trader he wants to be.

The Type Determines The Method

Once you’ve decided on the type of trader you are, you’ll need to follow the trading methodologies that are appropriate for you. If you’re a day trader for example, you’ll want to focus more on technical analysis techniques such as support and resistance levels. Day traders don’t particularly pay attention to the general economic climate or too much about fundamental analysis.

Swing trading is a very popular technique used by Forex retail traders. In this article, I will discuss what it takes to succeed in swing trading, as well as the most common mistake made by swing traders.

What Is Swing Trading?

The currency market is famous for large price fluctuations. Prices may ‘swing’ upwards one week, and later ‘swing’ downwards the next week. Swing traders are people who attempt to ride these large price ‘swings’ to profit from them.

There are so many traders in the currency market, and yet only a few are able to consistently make money. These are the people who are able to do the things that thousands of others can’t. They are truly exceptional people.

In this article, I will briefly discuss the 2 main characteristics successful traders, and why it’s so hard for others to follow in their footsteps.

Characteristic #1 - Discipline

In my opinion, this is the number one reason why most people fail to make money in Forex trading. There are plenty of educational resources to help most people become (at least) decent traders, and yet most people don’t follow these useful teachings.

What is backtesting?

Backtesting is essentially the testing of a trading system using historical market prices, to see how profitable that system can be. This testing is usually done with computer software that runs the trading system through a period of time in the past.

Why beware of backtesting?

Many new traders think that good backtesting results will guarantee similar results in the future. This is a big mistake because a system that has worked in the past may not necessarily work in the future. And this is because the Forex market is always changing and evolving. The Forex market today can be very different from the Forex market last year. The past does not equal the future… if it did, we’d all be millionaires by now!

Forex trading is a very appealing way to make money online. Trillions of dollars exchange hands every day, and entire fortunes are made and lost literally overnight.

Part of the attractiveness of the Forex market is the ability for retail traders to trade on margin. Margin trading essentially involves the ability to trade a large sum of currency using only a fraction of your own money.

For example, when trading on a margin of 1:100, you can control $10,000 worth of currency using only $100 of your own money. This is what lures many amateur traders to take part in this multi-trillion dollar market - the potential to make a lot of money, by risking only a little of your own.

Many beginner Forex traders are lured by promises of overnight wealth and instant riches. They get excited over the prospect of making $300 in an hour, and can’t wait to get started. Unfortunately, this is the type of attitude that gets most people into trouble.

Now don’t get me wrong… Forex trading CAN be a very lucrative activity (or hobby, even), provided that you know what you’re doing. Most people however, start off on the wrong foot and inevitably wipe out their entire trading accounts.

The Secret of profitable Forex trading is not about making money

Profitable Forex trading is not easy. In this article, I will share with you 2 more tips that have helped change my mindset about trading for the better.

Tip #1: Don’t Try To Pick Tops And Bottoms

Never try to predict market tops and bottoms. There are many traders that are obsessed with trying to pinpoint the exact time when prices will reverse, hoping to ride the market when it does. These traders are called contrarian traders because they’re betting against the current market trend. Contrarian traders may succeed every now and then but more often then not, they suffer multiple losses.

With only 5% of all traders being profitable, it goes to say that becoming a good trader is no easy task. Throughout my trading career, I’ve learned many valuable lessons that have helped me tremendously in the way I think and trade. In this short article, I’ll share with you 2 important tips that I’ve personally applied to my own trading methodologies, and I hope you’ll be able to benefit from them as much as I have.

Tip #1: Pay Attention To Your Thoughts & Feelings

With only 5% of all traders being profitable, it goes to say that becoming a good trader is no easy task. Throughout my trading career, I’ve learned many valuable lessons that have helped me tremendously in the way I think and trade. In this short article, I’ll share with you 2 important tips that I’ve personally applied to my own trading methodologies, and I hope you’ll be able to benefit from them as much as I have.

Tip #1: Pay Attention To Your Thoughts & Feelings