5 Important Factors in Forex Trading
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Thread: 5 Important Factors in Forex Trading

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    Trader pajero's Avatar
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    Lightbulb 5 Important Factors in Forex Trading

    In my opinion there are 5 factors that greatly influence our success in forex trading, where if we can do all this we will be able to succeed and if we don't have one of these we will never succeed

    • Trading System


      The most basic first thing about trading is the trading system. The trading system is one of the important components in trading in my opinion because with this trading system we will be able to recognize price movements. Without a tarding system we will not be able to trade well, like if in a war, trading the system is our rifle, our weapons that we use against the enemy. When we have to buy, when do we have to sell and when we wait and see, it can all be read from the system we have.
      Use a trading system that is comfortable with us, don't just follow what others use, because it looks profitable, because other people's trading systems do not necessarily suit us, because everyone has different characters and desires. So when we only use someone else's trading system, it is not necessarily convenient for us to use and the results are not necessarily as maximum as the people who use it.
      So before deciding to use or choose a trading system, identify our character first, what we want. So that we have a filter to choose which trading system is right for us so that when we use it, we will be able to feel comfortable using it, and when we get comfort then the trading results will be maximized

    • Trading Rule

      We all know if in trading we are free to do anything, there are no rules that limit and regulate us. But without us knowing it, actually we need a rule, a rule for ourselves. And the function of these rules is to organize our trading so that it can be organized and directed. Because without rules we will tend to be confused and not know what to do.
      Therefore we all really need a trading system. Because the trading system will be clear, what we have to do and what we should not do, so it will be easy for us to trade by just following it

    • Money Management

      The third component that is important in trading is about management. A business will be successful if it is managed well, as is the case in trading. A very profitable trading system does not guarantee that we will succeed if there is no money management in it. But on the contrary, a normal trading system can provide consistent benefits if we apply good money management in it
      Because in trading, a profit and loss is something that we certainly get and we cannot avoid. So what we can do is manage it, so we can get accumulated profits at the end of our trading. So if we trade without good management money, our trading will never progress and develop

    • Trading Plan
      Besides good management, the last thing we must have in trading is good planning. Planning will help us reach our desired goals easily and purposefully. In this planning we can make step by step all the things we have to do in achieving our targets.
      Trading plan contains targets that we must achieve in trading. This is important because when we do something without a clear target, we will be confused and our efforts will be in vain because for nothing. If without a target, we will lose time, energy, mind and money without realizing it, for something we don't know for what

    • Discipline and Patience
      After all the components that I have explained have been made, the last is patience and discipline. Because it's useless we have all these things if we can't afford to implement them, and commitment to run all these components. Discipline will make all the components work properly as they should, and patience will always make our emotions well controlled.

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    Last edited by pajero; 02-14-2019 at 09:07 AM.

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    Trader SimonAnderson's Avatar
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    Also don’t forget another important thing : Capital. Whether it small, or big, it play a very important role in trading. I can impact to other aspect too.

    Being undercapitalized, traders tends to risking bigger part of his account to trade, in order to able to make decent profit. Also this can lead to overtrading and compromise the trader’s discipline to stick to the rule.

    On the other side, proper capitalized traders, not have tendencies of overtrading and risk bigger portion of his/her account, as bigger capital only need to gain small percentage of profit to make decent income from it. So the trader will have more tendencies to stick to the rule.

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    Trader pajero's Avatar
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    Quote Originally Posted by SimonAnderson View Post
    Also don’t forget another important thing : Capital. Whether it small, or big, it play a very important role in trading. I can impact to other aspect too.

    Being undercapitalized, traders tends to risking bigger part of his account to trade, in order to able to make decent profit. Also this can lead to overtrading and compromise the trader’s discipline to stick to the rule.

    On the other side, proper capitalized traders, not have tendencies of overtrading and risk bigger portion of his/her account, as bigger capital only need to gain small percentage of profit to make decent income from it. So the trader will have more tendencies to stick to the rule.
    I think the use of capital must be gradual, starting from the small first, why? because trading with a real account requires good mental and emotional, and it needs to be trained. So we can not still be early and beginners suddenly immediately use large capital, because of course we will not be mentally capable and ready, instead we will get a big loss.

    If using small capital tends to make us always trade with high risk, it depends on the mindset that we have, if our mindset is right, then we will not trade with high risk with even small or large capital, because we understand everything the process and it takes time to succeed.

    I forgot to add, all the trading components that I mentioned all of them, of course, must start with the right mindset, so that we can treat trading properly, so that all the trading components we can run properly

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    Trader SimonAnderson's Avatar
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    Quote Originally Posted by pajero View Post
    I think the use of capital must be gradual, starting from the small first, why? because trading with a real account requires good mental and emotional, and it needs to be trained. So we can not still be early and beginners suddenly immediately use large capital, because of course we will not be mentally capable and ready, instead we will get a big loss.

    If using small capital tends to make us always trade with high risk, it depends on the mindset that we have, if our mindset is right, then we will not trade with high risk with even small or large capital, because we understand everything the process and it takes time to succeed.

    I forgot to add, all the trading components that I mentioned all of them, of course, must start with the right mindset, so that we can treat trading properly, so that all the trading components we can run properly

    Mastering emotion and good mindset is also a skill that trader have to train through years of trading.

    I once taught one of my friend how to trade forex, because he want to earn additional income from trading. I gave him my most simple and profitable trading system so he can adapt and do it independently. Long story short, while I still mentoring him, he’s doing great, being able to execute the trading plan flawlessly. But after I let him trading alone without my supervision, he was kind of going some kind of frenzy trading executing many revenge trade, and eventually going broke. That moment I know, even if a trader have good trading system and money management, it doesn’t guarantee him to be succesfull. Emotion and mindset also have a biggest part in trading, and it can’t be taught by any mentor, it only can get through years of experience.

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    Trader pajero's Avatar
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    Quote Originally Posted by SimonAnderson View Post
    Mastering emotion and good mindset is also a skill that trader have to train through years of trading.

    I once taught one of my friend how to trade forex, because he want to earn additional income from trading. I gave him my most simple and profitable trading system so he can adapt and do it independently. Long story short, while I still mentoring him, he’s doing great, being able to execute the trading plan flawlessly. But after I let him trading alone without my supervision, he was kind of going some kind of frenzy trading executing many revenge trade, and eventually going broke. That moment I know, even if a trader have good trading system and money management, it doesn’t guarantee him to be succesfull. Emotion and mindset also have a biggest part in trading, and it can’t be taught by any mentor, it only can get through years of experience.
    It is very true that this happens very often, and I have experienced it too, where if our mindset is still wrong then our trading can be chaotic.

    Mindset is like a foundation in a building, and the five components of trading that I mentioned are his home. So if the foundation is strong, the house that will be built on it will be able to stand firmly, but if our foundation is fragile then any grand house to be built on it will surely collapse

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    Trader ara's Avatar
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    There are lots of good articles about how to improve the quality of trading in this forum, and this is one of the good articles that I have met in this forum. I fully agree with everything you write here, 5 important factors that are obligatory to be followed by traders who still difficult to be consistently profitable in forex trading. Discipline and patience are usually difficult for beginner traders.

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    Trader pajero's Avatar
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    Quote Originally Posted by ara View Post
    There are lots of good articles about how to improve the quality of trading in this forum, and this is one of the good articles that I have met in this forum. I fully agree with everything you write here, 5 important factors that are obligatory to be followed by traders who still difficult to be consistently profitable in forex trading. Discipline and patience are usually difficult for beginner traders.

    Thank you very much for your appreciation. I write this all based on the experience that I have experienced, that all these things are important factors in trading after the mindset of course

    And discipline is not only difficult for beginners, but difficult for anyone who still has the wrong mindset in trading, the fact is that there are many long-time traders who are still difficult to implement discipline, so to be able to implement discipline the main key is to have a mindset correct in trading, and make discipline part of our lives or our habits, then in trading we will be able to automatically discipline

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    It is especially important to take time to learn. I know a few people who first started trading in forex, and then began to learn how to trade in forex, after they lost a lot of money.

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    Quote Originally Posted by Kaliosa View Post
    It is especially important to take time to learn. I know a few people who first started trading in forex, and then began to learn how to trade in forex, after they lost a lot of money.
    Therefore do not wait to lose money first just learning, but first learning and having knowledge that is enough to just start using our money for investment in forex trading. Make all the components that I mentioned in this thread so that our trading can be safe and can develop according to our goals and our targets can be achieved later over time

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    It is right that there are so many factor that tell us that forex is the best trading strategy in the trading. the forex is money making machine. i agree with your 5 points of the trading . when we start over trading , we make some best goal want work with patient to achieve the goal and full fill over target then we become good trader in the market.

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