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None of the 31 men that represented South Africa at the World Cup Rugby in Japan got there by going on a short course and then stepping out onto the global stage. It took them years of dedication, the right mentors and a bit of luck that they were blessed with talent to compete at the highest level.
Why is that so many believe that they can register for a forex trading account and become millionaires overnight? The truth is that social media is littered with people holding wads of cash and posing next to flashy cars and very few of them achieved that success by trading. Most have just conned their clients into parting with their hard-earned money for a short course and the promise of great riches.
Reality check: no one gets rich over night by trading forex, but you can lose your shirt if the education you receive is substandard. You need to have a couple of sound principles that will get you through the early days.
Have a plan
It is essential that you develop a trading plan and only execute a trade when the plan you have devised says it is time to trade. Clients often suffer their biggest losses when they trade without a plan, simply trading for the sake of trading the markets.
Plans should be quite simple so that you can adjust them if you feel that they are not working as well as they should. Small changes can make a huge difference and it is important to make notes so that you can go back and evaluate.
Try and avoid having too many indicators that will affect your ability to make a decision. Many traders will have lines and shapes drawn onto their platforms that, more often than not, confuse traders and hinder their ability to make profitable trading decisions.
Risk management
Sound risk management is key pillar to success. There are many ideas on how much one should risk on any trade, but a sensible approach is to risk between 1-2% of your capital per trade. If you are unsuccessful you will still have resources in your account for the next trade.
So many clients lose 10-20% on a trade and this affects their psychology for the next trade. Either they try and chase to get the funds back or they don’t take a trade that has set up perfectly according to their trading strategy. Both can be account killers.
Market understanding
It is vitally important to understand the market that you are trading. Know which economic events can influence the direction the market might take and when they are being announced. Economic calendars are extremely useful as they not only give you when the announcements are, but also how much of an impact they can have. Good ones will give you a consensus of what the market is anticipating and which way the market will move if the number is better or worse than expected.
By learning to understand how one or two markets trade, you will get a better grasp of how they move and operate. Forex platforms have a wide variety of products including commodities, equities (shares) and indices. Spreading your trading across too many markets can make it difficult to understand the nuances of each.
Blackstone Futures advocates that you take your time developing your plan, your risk management and which markets are most suited to your trading style. Forex trading can be a very lucrative second income or even a full-time job where you are your own boss, decide on your own working hours and more time doing the things that matter to you in life. It does carry risks but for those who put the effort in, it can be a great part of your long-term wealth creation plan.
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