The Holistic Traders Triangle to Become a Prop Forex Trader
Crafting Your Path to Successful Trading with the Three Pillars
The Holistic Trader Triangle to Become a Professional Forex Trader
Three Key Elements to Transform You Into A total Professional Forex Trader
Think of an equilateral triangle - all three sides are equal and make up the whole shape. Sometimes, one side might change and become longer while the other two become shorter. This can make the triangle look different, like a sharp or a wide-angle triangle, before going back to being equal again. If you can picture this, you've pretty much imagined what it means to be a trader who is always changing and adjusting to different situations.
To be a successful trader, you need to focus on three main aspects. The first one is having the right technical knowledge, the second one is managing risk and money effectively, and the third one is maintaining a strong and positive mindset for trading.
If you want to be a Holistic trader, you need to be skilled in three important areas and have them all adjusted to fit your own trading style. These three areas all depend on each other and create a balanced and positive trading environment. They are separate, but they always affect each other.
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The Technical Edge
The first part of being successful in trading is your ability to understand and analyze the market. You need a clear and reliable method for doing this, which includes looking at charts or finding information in a way that makes sense to you. This knowledge gives you the advantage of being able to identify the prices and events you want to base your trades on.
Your trading strategy is an important part of your technical knowledge. Having a good plan will give you an advantage and help you use your analysis skills to make successful trades.
It's important to stay open-minded and keep learning about the market. You should always be ready to do research and learn about new things happening in the market. Since the market is always changing, it's crucial to be able to adjust and adapt to these changes.
You can use a Holistic Trading Plan template PDF to help build and manage your own plan, the way professional forex traders do. Download it here- PDF trading plan here.
Money Management Edge
The next important thing to consider when working towards your goal of becoming a professional Forex Trader is managing risks. It's crucial to always be prepared for the worst-case scenario and have safeguards in place to protect yourself from potential risks. The market is unpredictable and can throw surprises our way at any time, so it's important to have a plan in place to protect yourself early on in your trading journey.
Always remember to be cautious with your investments. Start by taking small risks and only choose the ones with the best potential for reward. By being careful and patient, you'll maximize your chances of success in trading. Even though you might miss out on some opportunities, the ones you do take will be more rewarding and make up for the ones you passed on.
If you take bigger chances with each trade and jump into the market too soon, you might make more trades, but you'll probably end up losing more often. When you take bigger risks, the potential rewards are not as great. No matter how you think about it, being patient is the key to success.
When considering risk management in trading, it's crucial to understand the impact of your risk-reward ratio. For instance, let’s say you have a range of 100 points in the market. If you decide to risk only 5 points in order to potentially make 95 points, your risk-reward ratio would be 95 divided by 5, which equals 1 to 19. This means that for every 1 point you risk, you stand to gain 19 points.
On the other hand, if you increase your risk to 10 points for the same 100-point range, your risk-reward ratio would become 90 divided by 10, resulting in a ratio of 1 to 9. By doubling your risk, you effectively halve your potential reward. This illustrates the direct impact of adjusting your risk on your risk-reward ratio.
By consistently applying this type of risk management in a systematic way, you can substantially improve your reward potential compared to trading without a disciplined approach. This emphasizes the importance of patience and strategic risk assessment in achieving favorable trading outcomes.
Lastly, learn where the odds are best for you. Where are the entries with the lowest risk probability? This will give you a huge edge in the way you manage your risk. It’s not only about when it’s also about where. This is where your analysis comes into play big time.
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Trading Psychology Edge
It's crucial to recognize that trading is a very personal experience. There's no one-size-fits-all approach when it comes to managing your emotions while trading. It takes time to understand and control your emotions. Identifying your strengths and weaknesses and learning how to work with them is key to using them in a way that doesn't hurt your trading.
An action plan will be extremely useful here as well because it will hopefully be based on a personality map of your unique mental characteristics. You need to know how you’ll react to all the events you’ll potentially face while trading. From there you can form ways to how you’ll react to all of these situations. A well thought out action plan based on your unique psychological state gives you a huge leg up when trading. Without it, you could quickly find yourself lost.
Another important aspect of the mental side of trading is to be self-aware and approach trading ego-free. There is no need to impress anyone, only to keep your bank account on the positive side. Cut out your ego and look inside yourself, be honest with yourself and truthful, and the market and your actions in it will become clearer.
Putting the Holistic Trio Together to Become a Professional Forex Trader
Once all the elements are put together, the work still doesn’t stop. To stay effective, you’ll have to modify certain pieces over time, all of the time. Go deeper, do more research, engage in more experiments, and cultivate more awareness. Keep adding everything you learn minute by minute to your plan. The best trading plans are never finished. They need to constantly evolve in order for you to survive in the market.
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Love the trading plan template🙏. Thank you