Daily Bulletin

Business Mentor


The forex market is the most liquid and largest financial market which makes it a popular place for online traders interested in making profits from the comfort of their home. Every year, a good number of newbies step into the dynamic currency market to tap into profitable opportunities. Beginners have to spare some time to learn and understand the market dynamics before carrying out the trading process. Two of the most popular forex trading platforms that new traders prefer are MT4 and MT5. MT4 is pretty basic and simple whereas MT5 is gaining popularity as this platform has advanced features and powerful tools.  

But the most important tool that one needs for navigating the market and attaining success is knowledge. In this article, I will be sharing some valuable insights about forex trading along with 5 ways to improve your success rate as a forex trader.

  • Use Demo Accounts as a learning platform 

Learning is the first step towards success in the forex market and demo accounts can be utilized as a platform for practical learning. Almost all forex brokers offer demo accounts for free and you will be getting the very same features, tools and trading conditions that you get on a live or real trading account. The only difference is that you will be trading with virtual funds and the trades you place won’t have any connection with the real market. However, you will get to practice in a realistic setup and will get to see the results of how trades would have turned out in the live market. 

You will be able to learn the technicalities of trading and develop analytical skills by observing the market in real-time. Even experienced traders depend on demo accounts for testing new strategies or trying new trading techniques without risking real money in the first place. You can backtest a strategy using historical market data but only demo accounts can be used for assessing the performance of a strategy in the current market situation. Most traders choose the MT4 trading platform for practicing how to trade because of its user-friendly UI; plus it has all the necessary tools and features that traders would need to backtest their strategies and/or create new ones. 

You can freely trade multiple pairs and experiment with different strategies for finding the most ideal pairs for trading and the most suitable strategy to attain your trading goals. Those who are confused about which trading style will work for them, can trade with different time frames on a demo account and figure out the apt trading style to follow in the forex market.

Seeing the potential profits and losses on a demo account will help you assess your risk tolerance by thinking about how you would have responded to the losses if you were trading with real money. It would be hard to evoke emotional response in the simulative environment but you can train your mind to manage the emotions if you follow a serious approach in demo trading.   

  • Study about market trends and technical analysis

In order to make profits as a trader, you should be able to find ideal trade setups and open positions at the right time and the right price. You need to be good at technical analysis and spotting market trends to catch profitable trading opportunities with ease. So, you need to take some time to study the market trends and technical analysis for interpreting the market situation based on the patterns formed by currency price movements. 

The price patterns can tell us a lot about the market direction and potential price movements. Those who can anticipate or predict price fluctuations with accuracy will be able to win more trades by making calculated moves. The method of analysis and patterns you look for in finding the perfect entry points are crucial elements of your trading strategy. 

Talking about market trends, you will see two types of trending markets depending on the direction in which the prices are moving. When there is a constant rise in prices, we refer to it as an uptrend and a consistent decrease in prices is referred to as a downtrend. An uptrend is also known as a bullish trend as there will be more buyers in the market and a downtrend leads to bearish sentiments with more sellers. 

In the forex market, you will be able to make profits in any situation by opening a position based on the market direction. When you see an uptrend in a pair, you need to open a buy position which is referred to as going long and when there is a downtrend, you should enter a trade to sell the pair referred to as shorting. Understanding the market trend is important to decide the type of position you should enter and for this, you need to master technical analysis.   

  • Gain confidence

Many traders lack confidence in their own abilities and strategies, which makes them doubt their own decisions while trading. Second-guessing your choices is good when you are trying to identify mistakes and follow a cautious approach in trading. But lack of confidence can make trading harder for you as you will be in confusion about which direction to move to get the desired results. Confidence comes with knowledge, skills and experience in the market.

It will surely take some time to gain confidence as a new trader. You need to focus on developing your skills and expanding your knowledge by indulging in continuous learning. It would be a lie to say that a trader’s win rate has no relation with confidence. Because the more trades you win, the more confidence you will have in your trading system and skill set. It is normal to lose confidence when you are encountering frequent losses.

But you need to overcome the challenges by staying committed to your goals as a trader. If you are afraid to enter a trade, think logically and see if the fear is irrational or if it is because the trade isn’t worth the risk you are taking. Demo trading surely helps a lot in building confidence. The main reason behind many traders not having confidence is not practicing enough. Those who trade on a demo account for 4 to 6 months will feel more confident when switching to a live account. 

  • Celebrate the small wins

Many traders take the small wins for granted and become greedy for a higher profit. It is a good strategy to let your winners run but placing more trades after a winning streak will only make you lose the profits that you earned. You don’t need to reach your profit targets every time and it is ok to call it a day after catching a few pips. Remember the market is not the same every day and some days you will have to settle for the small wins. Being satisfied with a smaller amount of profits saves you from encountering huge losses by placing more trades.

Another mistake that many traders make is using too much leverage to amplify their profits. But the excess leverage also increases the risk and your account drawdown will increase if you lose the leveraged trades. So, it would be better to use leverage in limits and focus on being consistent without being too fixated on how much profit you make at the end of a session. You will surely be able to grow your account eventually by being disciplined and staying true to your plan.  

  • Plan your trade exits 

Traders always analyze the charts a lot before deciding their entry point. Entering the trade at the right time does increase your profit potential but exiting the trade at the right time and at the right price is just as important for getting expected results in the end. Automating your trade exits by placing stop loss and take profit orders would be ideal to secure your profits and limit potential losses. A winning trade can turn into a losing trade if you don’t exit in time before the trend reverses. You should always have a plan for limiting the losses if the market becomes unfavourable. 

Your stop loss needs to be at the right place, neither too tight nor too wide. Some traders place the stop loss too close to their entry price but doing so can lead to the position being closed even before the trade starts running. Especially when pullbacks are happening as the prices pause and move in opposite directions before the trend gets resumed. So, your stop loss needs to be at a place that confirms a significant loss but not too much. Your risk tolerance needs to be considered while determining the stop loss level. 


To sum it up, your success rate as a forex trader has a lot to do with your knowledge, skill level and risk management. Having a solid strategy and an optimal risk/reward ratio are key ingredients for attaining success in the long run. You should not expect to decode everything about trading within a day or two. But you will be able to figure it out with practice and experience. 

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