The main problem on Forex, which most novice and experienced traders face, is the stability of earnings. Situations, where profits from currency speculation fluctuate from zero to half the capital and sometimes turn into a loss, are familiar to everyone. How to make trading more predictable? How to consistently make money on the Forex market? Let’s consider the reasons why trading turns into a gamble with an unpredictable result, and ways to make the income from trading more constant.
Lack of discipline: the main enemy of a trader
In trading, discipline is as important as having a good trading strategy. Traders who continuously violate the rules of their systems, rarely achieve success in the Forex market. Forget about the stability of the results with such an approach. Why is it so important to adhere to the rules of a trading strategy and not to open transactions under the influence of intuition?
Any trading system should be tested on historical data and a demo account before being used with real money. This stage is necessary to get statistics and have a clear idea of what you can expect in the future. In fact, with the help of qualitative testing, you can predict the future financial results of your trading with this system.
What happens when a trader deviates from the rules of the strategy? Once you open an order not according to the signal, there is no longer any sense in expecting the result from testing. If the order is profitable, you will increase the total profit for the month. Otherwise, get unreasonable losses. The more often you break the rules and do not trade with signals, the higher the spread from a loss to a profit you will have.
If you are thinking about how to make money in the Forex market consistently, never be influenced by intuition if your trading system is already debugged to automatism. The pursuit of short-term profits can have sad consequences for your trading account.
Competent money management as a guarantee of stability for the trader
There are only two fundamental principles of risk management that a trader needs to know. The first one says: “Let the profits grow, nip losses in the bud.” The second is the correct choice of trading volume when opening an order. To figure out how to consistently make money on the Forex market, you need to discover why you need to manage your capital properly.
Often, due to lack of confidence in actions and for some other psychological reasons, traders rush to close order as soon as it enters the positive zone. At the same time, they keep losses to the last, which sometimes has a very adverse effect on the balance of the deposit. To earn on Forex, and not to lose, you need to do the opposite. Uncertainty in the trading strategy is easy to overcome by long and thorough testing of the system on a demo account or history. Only when you are confident in every open order, then you can easily hold a profitable deal to the required level.
The second problem for traders who have not yet reached stability is the periodic or permanent excess of the allowable lot. If the deal turns out to be profitable, the income of the trader increases, but since the majority neglects the rule described above, often the losses from such manoeuvres turn out to be much larger than the random profits. Do not exceed the level of risk of more than 2-5% of the capital. Your trading will be safer, and profits will be more stable.
It is not so difficult to achieve a stable income from trading. It is important just not to exceed the risks and trade according to a verified trading strategy. This is enough to make your income on Forex stable.
Remember that the profitability
of trade depends very much on the broker you have chosen!