6 Critical Success Factors For Forex Trading
Forex Trading: Online, Day trading has exploded across the United States. Some investors have been very successful and boast of huge profits made in incredibly short periods of time. However, there are many others who suffer devastating losses because they have not exploited all 6 critical factors necessary for a successful future and Forex Trading.
Success in any profession can be divided into a number of critical factors. Trading is no different. A commercial success strategy incorporates the following six factors:
1. Determining Advantage: Trading futures is a zero sum game. There must be an identifiable benefit in the other market participants.
2. Disciplined Execution: There is no point in identifying an advantage if there is no discipline to follow through. Create a plan, stick with the plan, and then determine if the plan is successful. If not, change the plan. The important thing is disciplined execution.
3. Money Management: If the risk per trade is too aggressive, then you run the risk of blowing up an account. If operations are very conservative, then the opportunity to optimize profitability is lost. It is important to set the maximum expected draw down of any system and set money management rules accordingly.
4. Create a trading plan: A business plan will determine what will be done in a given situation during a day of trading. A plan helps focus on execution.
5. Responsibility: The responsibility lies with the merchant. Gains, losses, success or failure is determined by the skill, determination and discipline of the trader.
6. Commitment: There must be a commitment to all trades according to plan. The forex trading offers us good and bad times. Not to be overconfident in good times, and not to give up bad. You also have to compare actual results against the plan for a complete diagnosis