A strategy provides you with the means to transact on the currency markets in accordance with a set of rules. If you want to win at Forex it is important to follow a disciplined approach. This will help you to improve your results. However don’t’ expect to win every time. Trading is all about taking steps to swing the odds in your favor.
In this article I take a look at some ways of the most fundamental improvements that you can make to your trading process.
Understanding and implementing these steps will provide you with the basic foundations upon which you can build what every trader is looking for; a platform for winning.
1. Learn The Basics
Many people who decide to start out trading do so by simply picking up an ‘off the peg’ trading strategy. They do with this expectation that it can be used to turn a quick profit.
This path if fraught with problems as it prompts the trader to jump into the markets without a sufficient level of core knowledge.
Rather than learn the basics and then supplement this knowledge with a strategy, many new traders think they can circumvent the first part.
However as with any occupation you need a core of knowledge on which to draw. This will not only helps understanding, it also provides a pool of knowledge on which you can draw. It may seem a drag and delay your actual trading but spending time to build up a basic knowledge of the Forex markets and trading will help you to avoid making basic mistakes.
Don’t expect to run before you can walk. Do your homework!
2. Accept Your Role
No matter what system or strategy you choose to employ, the ultimate responsibility for your trading performance rests with YOU.
When you play at Forex trading there is no blame game!
You have to learn to be responsible for your own actions and take them on the chin. Instead of becoming frustrated about a loss, use setbacks as opportunities to learn and improve.
To this end you should develop and master the skills that will allow you to look critically at yourself not just your system. Often when you trade, less can be more. Don’t make the mistake of changing your system or adding another indicator to your chart. Be honest with yourself and work on your own improvement.
If is not a failure to admit that you are wrong. Just be sure to use this information to improve.
3. Define A Strategy
The core of every successful traders approach is based upon employing a good strategy. This will provide a structure for trading discipline and help to provide you with a trading edge which can ultimately be exploited for gain.
Think of setting up your strategy like putting together a battle plan.
You need to plan your approach carefully and anticipate your opponents move. You can’t second guess this so you will also need to know what to do if this plan changes which, more often than not. It will.
This is why should think about all aspects of it carefully. You won’t win when trading Forex every time. What is important is that you plan for each eventuality. You can then work out when to take your victory and also when to accept your losses and run.
The quicker you accept your losses and get out, the stronger your account will be to fight another day.
4. Be Prepared To Adapt
The foreign exchange markets are not static entities. They are fluid with trends and dynamics that change over time.
To keep on top of them you need to be able to adapt and adjust his strategy to match this changing face of Forex.
However there is a fine line between changing your strategy every five minutes and maintaining a fluid approach to trading. This is a skill that you will learn as your experience of the markets grows.
Changes that you make should be based on informed data, not ‘spur of the moment’ trading decisions. Planning and structure will ultimately win out against the maverick approach.
5. Embrace Your Success
There is nothing wrong with embracing your trading success. After all, if you want to win at Forex then you are going to need to be successful.
There is a big difference however between embracing your success and basking in over confidence.
Be sure not to let your success turn into over confidence as this can quickly set you up for a fall.
Becoming a winner is all about maintaining discipline and keeping your confidence in check. The markets don’t pay any respect to ego’s and are happy to take back any winnings you have made quicker than you made them in the first place.
For this reason you need to remain humble, maintain a disciplined level head and stick to your plan.
Although it can be hard to make money from Forex, if you remember the five points above you will give yourself the edge and win at Forex more than you lose.