Only Profit or Consistent Profit! What defines your forex goal? Obviously, many voters will go in favour of Consistent Profit.
One of the hardest goals in this financial war is to achieve regular profit. According to research out of 33% of traders who make a profit, only 7% do make it consistently. Unfortunately, more than 90% of traders fail to achieve this goal. We can’t say it’s impossible to achieve. Read this post to know the answer: How to make a consistent profit in forex?
Firstly, choose a consistent trading strategy with a low risk-reward ratio. Secondly, avoid high leverage positions. Finally, maintaining a trading journal and keeping your research updated about indicators and market situation.
To get mastery over your trading strategy and style, you need to test it on a demo account. Many professional traders open a consistent number of trades daily. They will never break their rules to do overtrade.
Keep reading to learn 5 powerful consistent trading strategies!
10 Tips to Make Consistent Profit in Forex
There are so many tips to help out traders earn consistent profit. First, you need to focus on your trading style. Let’s discuss 10 tips one by one in detail:
Choose Consistent Trading Strategy
Choose your strategy according to your trading type. Ask yourself whether you are a scalper, day trader, position trader, and swing trader. Day traders may have different long term trading strategy. But swing traders or position traders follow short term trading goals.
Some traders follow trends. Test different strategies and stay on one that you feel match your trading style. Forex is not a pyramid scheme. If you can trade like a market maker, you will defiantly end up with good profits.
Don’t Set High Risk-Reward Ratio
Not every trade is a winning trade. That’s why it is highly recommended to set the risk-reward ratio of 1:2 or higher. If a trader wants to make 50 PIPs from a given position, he should consider setting stop-loss below 25 pips.
This may help to set 40% of the winning trade. To make a consistent profit, your winning trades must be near to 50%.
Although you can trade aggressively to make more pips, we do not recommend doing that.
Set Realistic Targets
To earn consistently, it is essential to set realistic profit targets. Consider the volatility factor of different pairs before setting profit targets. For example, the EUR/CHF pair can move 50 to 55 pips per day.
It would be unrealistic to set a daily profit target with this slow pair at 100 PIPS. Consider pairs with average pips move from 190 to 210.
Say Big NO to High Leverage
High leverage is the main cause of consistent loss or bad trade. For example, with the leverage of 400:1, if the market goes against only 0.25% your capital will wipe off in seconds.
According to US regulatory reforms, there is 50:1 leverage on all major pairs. But some brokers offer 200:1 they are fake. Never trade with brokers who offer the high leverage.
Say Big NO to Risk High Percentage of Capital
Be cautious never risk more than 5% of your trading capital on a single trade. However, some professionals even suggest a lower limit of 2% on each trader. If risking more gives more profit, it brings loss quickly.
Always set a loss limit at the start. If you tend to lose consistently, we recommend you to get off from trading. Think about your strategy and enter in market when it goes in your favour.
When you are choosing your forex broker, make sure it’s a regulated low spread broker. We found that ICMarkets is one of the best broker as a regulated low spread broker.
Don’t Forget to Maintain A Trading Journal
Professional traders are disciplined buddies who maintain a trading journal. At month-end or year-end they track their performance through this journal. They calculate their monthly weekly and yearly earning and loss.
This helps them to set targets in the trading journey. It may add motivational value to the trader’s performance.
Try to Reduce Your Loss
For consistency try to reduce loss rather than making a profit. It does not mean the fear of loss. It actually means don’t repeat mistakes again and again.
If you are not careful, one wrong trade can wipe off your capital. Never try to hold on to the losing trading. This way you will lose more.
Other tips do not trade all the session like Asian session, Londo session or Network session. You have to know the worst time to trade and avoid that time.
Trading with Passion
Trading is not a money-making machine. It’s for those who are passionate enough to trade. If you think your main aim is to make money you may fail.
But if you think your goal is to trade and learn on a daily basis you will succeed one day. Make your work enjoyable and motivated for yourself.
Focus More on Long Term Positions
Consistency is possible when you focus both on short term and long-term positions. Many traders focus too much on short term goals and neglect long term positions. Consistency is all based on your long-term performance.
So, don’t try to make a huge profit in months. Set yearly and monthly goals and stay consistent on your own rules to avoid greed.
Say Big NO to Overtrade
In forex more is not good. That’s why trade less but trade right. For professional traders, 5 trades per day are enough. For scalpers and swing traders, the number of trades per day depends on the market situation.
There are many days in the market that are slow, volatile and highly liquid. It’s better to stay off during these days rather than overtrading
Bonus Tips: If you follow some major currency pairs for a long time, you see each currency pairs behave differently. So you need to choose currency pairs in forex trading that suite your trading style and personality. It can be 1 to 3 currency pairs at most.
5 Profitable Trading Strategies for Consistent Profit
Now you might think about what strategy bring consistent profit. There are a few on our list. Though we never guarantee that you will not lose.
So, test these strategies on your demo account and then try on a real money account.
1. London Breakout Strategy
The basic rule of this strategy is to get the benefit of the London session. It is the time when you can predict the whole day direction of many trading pairs. Open 1HR chart of your chosen pair and mark high and low for the day.
To set buy trade, wait for an hourly candle to close above and below the existing high before the London session opens. To sell wait for an hourly candle to close below the existing low price.
2. EMA Technical Indicator Strategy
The EMA technical indicator strategy is one of the best strategies for making a profit. With just one glance, you can determine the direction of the market.
EMA cross over strategy helps you to determine the higher and lower value. This way you can open a position based on market direction
3. Gann Trend Following Strategy
Gann related indicators are widely used to make a profitable trade. When the ribbon turns yellow it shows a downtrend in the market.
When the ribbon is blue or purple, it is a sign of an uptrend. The right position to enter in trade is when the candles close that trigger the colour switch.
4. Support and resistance strategy
To understand this strategy, you will have to know about bearish and bullish points. That means the market will turn bearish at the resistance level and bullish at the support level.
Traders set sell trade at the bearish point and buy trade at the bullish point. Many other tools are also available to set resistance and support level such as Bollinger Bands, Pivot Points, and Fibonacci Ratios,
5. Pin bar Strategy
This strategy uses Japanese Candlestick to predict future price movement. When the market is about to change the direction the pin bar movement shows this by creating an arrow.
Sometimes it is also used in combination with support resistance strategy. It helps to determine to stop the loss position.
Frequently Asked Questions (FAQs)
Can you consistently make a profit in forex?
Definitely, YES, it is possible to make a consistent profit in forex. For this, traders need to follow an effective trading strategy. Long term traders make a more consistent profit as compared to short term traders.
How can I make forex profit bigger?
You can make your profit bigger by adding to your winning trades plus capital. If you keep on adding your profit to enhance your capital, it will ultimately enhance your profit. For this, you need to follow a consistent trading strategy.
How do I set multiple take profit on MT4?
To set multiple trades on MT4, you have 3 options:
- You need to open multiple trades for every TP level.
- Monitor one trade at a time and close it manually when it strikes TP
- Use the MT4 addon app that will partially close EA to setup TP level. This way your trade will close automatically.
It’s evident from the above post that making consistent profit in forex is possible. If you follow the tips and strategies mentioned above you can set regular profitable trade. It is the best idea to try and test different tips on the demo account. This will act as a saviour of your capital.
When you feel the percentage of winning trade is near to 50% with a certain strategy you can go forward with it. One thing more long-term trading strategy bring continuity and more profit. What is your favourite strategy to make a consistent profit? Share your words with us!