You Won’t Believe How Easy It Is To Be A Profitable Trader

Good news traders! It is really not that hard to be a profitable trader after all! Why? Keep reading.
I completely agree that not many people succeed in the Forex market, but it has many reasons. Most traders who fail do not manage account well, plan things properly and stick to it. They lag discipline, and if you do not have a discipline while trading, you may end up on the losing side.

Forex trading has no single method or a recipe for success, so that’s why trading with a certain discipline plays a major role. You may win or lose at times, but you need to have a disciplined approach and proper MANAGEMENT skills to overcome tough times and excel.

If you have a proper money management, portfolio management and risk management coupled with a plan, the chances of having more numbers of winning trades than losing trades will always be on the higher side. All these things are not a rocket science, you just need to have a proper approach, and it’s pretty easy to be a profitable trader.

Profitable Risk & Money Management

I think the most important pillar of the Forex market is risk management. A successful trader always manage the risk and reward for each trade and take one step at a time. There are hardly any situation in which they lose control over trades, as they always keep a check on risk-reward and do not let their emotions ruin the party. So, to be a profitable trader, you should always have a defined risk reward. Like, for each trade the max risk you can take is 1% of your total account and so on. Using a high Leverage and high-risk trading is one of the top reasons why most newbie traders incur losses and face downturn.

If you do your risk control well, and take losses at the right time when a trade goes in the wrong direction. Do not get afraid of the number of attempts you make, you will be successful at the last when it’s the reward time. When you get a trade right, manage your reward as well. Don’t be greedy or at the same time don’t be anxious to close it well ahead of time.

Warren Buffett once said on fear and greed, “Two super-contagious diseases, fear and greed, will forever occur in the investment community. The timing of these epidemics will be unpredictable. … We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful”.

Plan Well

Any venture, business, company or idea without a proper plan never works. Similarly, in the Forex market, you need to plan well all things and execute it. You need to work on a strategy and keep a track of it. Once you find an appropriate strategy which provides consistent gains, you should stick to it. Remember, you need to be very organized, and always keep a track of your trading strategy and journal for a strict evaluation.

Proper Evaluation

For any plan or strategy to be profitable a proper evaluation and statistics is always must. In the Forex market, keeping a track of how much you lost and gained is very important. A proper report can be compiled every 30, 50 or 100 trades and a careful examination should be conducted to know how well or bad you did as a trader over a period of time.

Let’s say you invested 1% per trade for your last 30 trades. If we consider reward per trade as 4% and there is a winning trade every 3rd trade on an average, then you will have 10 winning trades and 20 lost trades. Let’s say your account size is $1000, then after 10 trades it will be like.

Trade	Gain/Loss	Gain/Loss Amount	Account Balance
1	Loss	$10	$990
2	Loss	$9.9	$980.1
3	Gain	$39.24	$1019.3
4	Loss	$10.1	$1009.20
5	Gain	$40.36	$1049.56
6	Loss	$10.4	$1039.1
7	Loss	$10.3	$1028.8
8	Loss	$10.2	$1018.66
9	Gain	$40.74	$1059.40
10	Loss	$10.5	$1048.9

The above example shows that even if you lose 7 out of 10 trades, you make roughly 4.5% profit. So, let’s say you take 30 trades in a month, then if you plan and trade well, you will end up making around 13% in a month. If we put it in a conservative way and make it half, you can easily make around 6% per month.

So, if you make around 6% per month, then for a $10K account in 12 months it will turn into $20K account (see graph).

 

Being Profitable – Summary

If you plan your strategies and personal targets well, keep a track of what you need to work on, learn, analyze, research, know how much you can invest, how you are doing as a trader, keep a track of strategies which are working, then it’s easy for you to be a profitable trader.

Enjoy and Trade well traders!

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