36 Ways to Rapidly Improve Your Forex Trading | Learn to Trade Forex | Scoop.it
1. Don’t focus on making money Focus on getting your trades to work. Money is a natural by-product of your edge being executed perfectly. 2. Think independently Don’t take a trade based on someone else’s reasons. Make up your own mind on whether it’s a good idea based on your experiences. The ‘pros’ get it wrong quite often. 3. Keep a tight journal of your results How can you know exactly how well your edge is performing if you don’t monitor it. Just looking at the profit and loss statement from you broker at the end of the month will not tell you the full story. You need to fill out a trading journal after each trade. 4. Screen shot all trades Whether it’s a winner or a loser, take a screen shot of all your trades and file them as part of your trading journal. Review each trade at the end of the week and see what you did right or wrong. “Those who do not learn from history are doomed to repeat it” 5. Have a risk management plan Points 3, 4 and 5 all tie in together, but this is the most important. Remember the first rule of trading forex is protect your capital, the second rule is, don’t forget rule number 1!!. Learn to manage your risk, be rigid in your rules and flexible in your expectations. 6. Don’t over expose yourself If you have 3 open positions split your risk don’t triple it. 7. Once a trade is live let go Emotionally disconnecting from the outcome of your trades is a crucial part of trading. If you are risking a $$ amount you are comfortable in losing, then you should have no problem letting go of the trade once it is live. You mind set needs to be: I am playing a system that has an edge on the market. There are a random distributions of wins and losses for any set of variables that define an edge. The result of this single trade is not important. 8. Trade just 1 set up or edge until you have perfected it before moving on Don’t be the “jack of all trades and the master of none”. I know how tempting to play a set up you have just learned about, but you are never going to get it to work unless you have a solid trading plan around it and you know it intimately. See point no. 2. 9. Have a trading plan If you fail to plan, you plan to fail. The problem with most small business ventures (your trading is a business, so treat it like one) is a lack of planning. You need to have a clear and concise plan for executing every trade you take. From entry to position size, stop loss, take profit as well as a plan for potential drawdown periods. Plan your trades, and trade your plan! Download a free Trading Plan 10. Back test Even if you have bought a system or strategy, you need to get the feel of it before you let it fly on a real account. Back testing is the best way to internalize the finer details of the system and price patterns based around it. 11. Trade smaller position sizes Only risk what you are comfortable loosing. If you become emotionally charged after a losing trade (or a winning one for that matter) chances are you are trading a bigger position size than you are really comfortable with. Forget the “don’t risk more than 1%” rule. Find an amount you are fine with loosing 10 trades in a row. (or the potential max drawdown of your system) 12. Accept losses Losing trades is the ‘cost of doing business’ for a forex trader. There is a random distribution to wins and losses for any set of variables that define an edge. If you experience a loss, shrug it off and move on…. Statistically it just means you are 1 step closer to your next win. 13. Get rich slowly If you are having money issues you probably need to stop trading until you have a secure source of income. Making good money in forex take time (3-5 year plan to becoming a professional). If you try to force it, you will start to make fatal errors that will affect your trading account in an adverse manner. Take your time, it’s not a race. 14. Focus on the process Do not become wrapped up in ‘is this trade going to win or lose’ mind-set. Focus on what you can control, a good entry (when your edge is present) sound trade management and logical take profit points. 15. Buy your stop This is the process of banking some money as your trade starts to work essentially buying your stop loss if the trade were to suddenly turn and head the wrong way. This puts you in a risk free position. You can also more your stop loss to break even, but nobody went broke banking profits. One the price has moved 20 – 30 pips take something out… even if it’s just 20% of the position. 16. Hit singles not home runs It is much easier to be right about a 10 – 20 pip move then it is to be right about. 100 – 200+ pip move. If you are a long term trader, think about adding a scalping or intraday strategy to your bag of tricks. It will keep your pip count ticking over while you are waiting for the stars to align on your longer term set up. 17. Treat your trading like a business not a hobby If you want to be successful in this game you need to be focused and use discipline. Pro traders don’t take trades after a couple of cold ones while watching the football. They are professional in every facet of their trading routine. 18. Use affirmations Using positive affirmations as a part of your trading plan. …