Keeping calm

Why Patience Is the Quality a Successful Forex Trader Needs Most

A variety of factors can affect a trader’s performance, keeping composure when under pressure is essential for success

One of the biggest misconceptions that you can have about forex trading is that you can quickly start making a living from it in a relatively short period of time. If you have any hopes of eventually making currency trading your career, you need to disabuse yourself of this belief since it may eventually cause you to become discouraged and give up.

The truth is, as with any career, you have to start small and then gradually build yourself up. The belief that you can make a big score in currency trading that will enable you to start making a living from it is comparable to the belief that you can simply go to the casino with a strategy and walk away with a big jackpot after having broken the house.

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Trading Capital

One of the major factors that will determine how quickly you can start to make a living from forex trading is the amount of your trading capital. Unless you can bring big amounts of money to trading, you will likely have to start with a small amount of capital and then build it up through winning trades to the point where you start earning enough of an income from it to sustain yourself.

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You can magnify your earnings by taking on large amounts of leverage, but if you do so, you should strictly follow risk management techniques. One recommended method to reduce your risk is to only risk 1% of your trading capital per trade. Thus, if you have $1,000 in your trading account, you should risk only $10 per trade. Assuming a leverage of 50-to-1, you can open a position of $500 per trade.

Building up Your Capital

The only way that you can make a living from forex trading is to have sufficient capital. Being undercapitalized will not only not give you the returns that you want but may also lead you to take on excessive risk in the hope that you can build up your capital quickly. Hence, the best way to eventually make forex trading your career is to gradually build up your trading capital through earning consistent returns.

It is also important when gauging your trading success to look at the percentage returns you enjoy rather than the amounts you make. If you can create a strategy that will give you consistently high percentage returns, you will enjoy bigger profits as your trading account grows.

This article was written by Zahir from MTrading

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