What you want in order to be successful with your Forex trading:
You must have a tested and definite trading strategy as well as extreme discipline to follow the strategy and execute the plan to the letter. You will want to be exact and precise with your entries, always going for the very best entries with the highest probabilities of success, with the lowest risk. You would want to evaluate the risk, not only in terms of pips but also in terms of strategy and chart pattern. For instance, if you are trading a breakout and this would be a long trade right at a strong resistance level, price very often turns back to test the breakout level. So your stop loss would need to be larger than usual in relation to your capital and you could feel very uncomfortable with it. In this case it would be prudent to wait for a second attempt at the breakout, and then be in a position to use a smaller stop loss.
Mark Douglas author of trading in the Zone wrote:
"The best traders have developed an edge and more importantly, they trust that edge."
As part of your trading edge, you require a high probability of success, you need to be able to enter and exit your trades without conflict or stress. Trade decisions are based on your strategy and not on preconceived ideas of your opinions.
Keep things simple and your trading decisions will be made with less stress and anxiety.
One of the most crucial factors in trading is setting goals for yourself. Set your self a daily, weekly and monthly goal. Trading without having very specific goals as to how much you want to make each day and how much you are prepared to lose daily, is a route to failure. These goals have to be very achievable. Notice I said VERY, not just achievable. You want to have VERY achievable goals.
People perform at their best when they have a goal, but it has to be attainable and realistic. You would want to start out small and slowly make your goal larger.
You will have losing trades and you will make mistakes, but the ultimate is to pick your self up and see where or what you have done wrong and correct it by managing your next trade better and striving towards flawless execution of your trades.
Losing in trading does not make you a loser. Taking losses in trading is part of the business. It is when you do not accept a loss and allow your losses to increase instead of closing a trade at a loss, that you have failed. Allow yourself to take losses just like you allow yourself to take profits. Allow your stop losses to be hit just like you allow your profit targets to be hit.
As you wouldn't move your stop loss, don't move your profit target. Don't be afraid that your target will not be hit, or you have just taken a loss so you want to quickly take a profit. Set your platform with a stop loss and profit target according to your trading strategy and allow things to happen, without any interference from you. By all means set a trailing stop to lock in profits, but all this can be done before you enter into a trade. Walk away if you want, but don't interfere with your trade.
Trading becomes easier and easier with repetition and practice.
Linda Wainman is the author of the day trading book "Keeping it Simple". http://day-online-trading.com Get access to free forex signals for 3 months! NOTE: You have full permission to reprint this article within your website or newsletter as long as you leave the article fully intact and include the "About The Author" resource box. Thanks! :-) |
No comments:
Post a Comment