HOW TO MAKE CONSISTENT PROFIT IN FOREX TRADING

One of the most amazing things I have found out is that, most amateur Forex traders believe that the results of the Forex market is not random, yet they can't seem to produce consistent profits. Shouldn't a nonrandom market produce consistent results and a random market produce inconsistent results?
What those new Forex traders fail to understand is; Events with probable outcomes can produce consistent results. Experience traders treat trading like a numbers game, which is similar to the way casinos and professional gamblers approach gambling.
To give you an example, let's take a look at the game of poker. In poker, the casinos have approximately a 4.5% edge over the player. This means that, over a large sample size, the casinos will generate net profits of $0.45 on every dollar wagered on the game.
You may find that 4.5% might not sound like a lot, but if suppose a total of $100million dollars is wagered collectively in the casino over the course of a year. The casino will net 4.5million profit!
Every professional Forex traders understand that every individual trade is a unique even, where the outcome is random relative to the last trade or the next trade. New Forex traders must know that in each individual trade, there will be a random, unpredictable distribution between winning and losing. But on a collective basis just the opposite is true. If a large number of trades are executed, patterns will emerge that produce a consistent, predictable, and reliable outcome.
Now, let us get into deeper psychology into how new Forex traders can succeed in producing consistent results by applying the following simple beliefs. Firstly, they need to know that it requires 2 levels of beliefs to be aligned in order to produce consistent results in a random situation.
At the first level, they must believe in the uncertainty and unpredictability of the outcome of each individual trade. On the next level, they must believe that the outcome over a series of trades executed is relatively certain and predictable. The degree of certainty is a function of how good their edge is.
It is the ability to believe in the unpredictability of the Forex market and simultaneously believe in the certainty of the outcome when a series of trades are executed that makes an individual Forex trader successful.
The belief in the uniqueness of each trade prevents experience traders from engaging in the pointless endeavor of trying to predict the outcome of each individual trade. Experience traders have learned and completely understand the fact that they don't know what is going to happen next. Most importantly, they don't need to know in order to make money consistently.
When you don't have to know what's going to happen next in Forex trading, you don't place and special emotions on each trades. In other words, your egos involved will not get in your way of trading effectively.

HOW TO BECOME A PRO FOREX TRADER

The first step on the path to becoming a professional forex trader is to realize that you will need a qualified source to learn from. By qualified source I mean a professional forex trader that has already paid their dues and put in the necessary screen time to develop a real and effectual trading method. Many beginning traders think they can skimp out on a solid forex education by buying a software program or subscribing to a signal service. This is simply not the case, the fact is that forex trading is not easy to be good at, as such; it requires consistent time and energy on behalf of the aspiring trader. This time and energy needs to be directed at learning a forex trading method that is both reliable and valid.
Once you locate and digest an effective and logical forex trading method it is then time to develop your trading plan. A complete forex trading plan should include the rules the trader will use for entry and exits, a risk management plan, as well as long-term trading goals. The importance of actually writing down your trading plan cannot be over stated. Having a concrete written out forex trading plan that you can read everyday will help you to remain disciplined because you will essentially have a written contract with yourself. It is important to inject some form of accountability into your forex trading plan because remaining disciplined and accountable is very difficult when there is no one to answer to but yourself. Read you’re trading plan daily and before every trade if necessary. It is very easy to become undisciplined and fall off the track towards consistent success trading the forex market.
After developing your forex trading plan and writing it down on paper it is time to take it for a test drive. One of the many great aspects about the forex market is that you can open up a free demo trading account very easily online with very little time or energy involved. Once you get your demo account up and running you can begin testing your forex trading method. It is vital to keep a running log of each trade you take so that you can get an idea of what your trading plan’s expectancy is. Expectancy is important because it tells you the win percentage of your system, or the probability of any trade being a winner or a loser. Understanding your trading plan’s expectancy will further help you fine tune your risk threshold for every trade so that you can maximize your returns.
After developing a winning track record of at least 2-3 months on your demo account and fine tuning your trading plan you can try your hand at trading real money if you feel comfortable enough. Be aware that live trading is totally different from demo trading; the variable of having your real hard-earned money on the line seems to elicit an emotional reaction even if you decisively control your risk on each trade. This feeling wears off after a number of trades, but be aware that breaking your risk-management rules that you previously objectively defined can have dire consequences and will likely induce a snow-ball effect of emotional mistakes that will quickly destroy your trading account. Following the advice in this article and taking a very disciplined approach to all aspects of your trading will allow you to profit in the long-run in the forex market.