Key To Success In Foreign Exchange
How to achieve success in Foreign Exchange is perhaps the most difficult to understand. Only practice that too on the right guidelines will help you achieve your targets in the world of foreign exchange. Perfect your strategies until you have them right. If you want real success as a trader or investor, go through the following guidelines to achieve success in online foreign exchange.
1. The Reliability factorDivide the number of winning trades you make by the total number of trades and you will get the reliability or the “hit rate.” For how long or what percentage of time you get to be “right” in your system, will show the reliability factor, which will define your success in foreign exchange world.
2. The size of your profitsCompare the relative size of your profits with your losses when traded at the smallest possible level. After getting a good idea of the relative size of your profits to your losses by taking the average size of your winning trades and comparing that with the average size of your losing trades, you can get a rough idea of relative size of your profits and whether you are successful in foreign exchange online.
3. Cost of tradingHow much does it cost you to make an investment or trade, can act as destructive force on your account size whenever you trade due to execution costs and brokerage commissions. Very often, traders simply include these costs when figuring the average gain or the average loss. Success in online foreign exchange also depends on the cost of trading. Hence, always be aware.
4. Opportunity to tradeHow often do you get the opportunity to trade? Imagine that you are holding the first three points mentioned here constant. But their combined effect will depend upon how often you trade. Thus, the opportunity factor can make a big difference to being successful in foreign exchange online.
5. Size of your investing capitalThe size of your trading or investing capital can have a direct effect on your average success in the foreign exchange world. Having a million dollar account will show different impact than a $1,000 account.
6. Your position-sizingHow many units you trade at one time or you r position-sizing model is another factor to which can affect your foreign exchange success. Obviously, the amount you win or lose per share is multiplied by the number of shares traded.
Just keep in mind the above factors if you want to be successful in foreign exchange online.