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Have you ever realized that some people seem to make a lot more money trading forex than others? Does it seem to you that no matter what happens in the market these expert traders always laugh their way to the bank. You ask yourself what these professional traders are doing, what sort of secret technique that they possess and you don't.
You get frustrated at the market when you lose again and again, and finally you think that it is just not possible for you to make it and you quit. This is a very common scene in the world of Forex trading. Let me share with you what the professional traders have that a new trader does not.
First, a proper money management plan. A proper money management plan is not just a way to protect your account. When properly utilized a good money management plan will actually help a trader to profit greatly. Sadly many traders ignore the benefits of a good money management plan and decide to instead on the gaining profits instead of looking to defend their accounts so that they can withstand market fluctuations. Thus in the end they fail as they can't make enough profits to cover their losses. A good rule of thumb is to set your profit objectives at least 1.5 times of the risk you will undertake. That means for every dollar your risk you aim to make 1.5 times.
Second, the psychology of trading. A lot can be said about how a person thinks and the success of the trade arising from the thoughts. A lot of successful traders have one thing common, they have a strong trading psychology. They are able to take defeat shrug it off and calmly enter the next trade. There is an old saying. "the man who does the same thing again and again and expects different results is crazy" The saying does not apply to traders. When we trade our plan we want to do it the same time and time again. Unfortunately unless we do it the same all the time, there can be no success for us. This leads us to our next point which is discipline.
Third point discipline. A successful trader must be discipline and persistent in trading. If your money management rules are fine and they should be, you must trade your plan. If you can calmly trade your plan and apply it to all the different market conditions it is highly likely that your pip profits will start rolling in. Should you choose to use a new method or act on a rumor (which happens a lot to new traders) then you have just slain your account. To build discipline you need to focus and you have to be able to trust yourself. This ties in with the second point of psychology.
In summary we can say that to be a good trader, one has to observe good money management rules, have a strong trading psychology which entails the trader to shrug off losses. And finally the trader must be disciplined in all aspects of trading. Follow these tips well and I assure you that you will see your profits come rolling in.
About the Author
Dr. Joshua Geralds is a successful investment specialist with over twenty years experience increasing the income of people world wide. For a limited time get his free Money Management to a Million Dollars e-course here: http://www.pipsalot.com
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