Sometimes, having a profitable strategy isn’t enough. There are many things you need to consider if you want to develop good habits, which is crucial for a trader’s development and critical before becoming profitable.
If you don’t have a sound trading system/method (not just strategy), then find one or simply use ecs.CAMMACD or ecs.SWAT! Whatever it takes, do not attempt to trade without a systematic approach. Ideally, your system will give you an edge.
When you have it, you should be ready to take the following steps to help create good habits and break bad ones. Here are my best 6 tips!
1. Knowing When To Trade
Long-term accounts require more rigid discipline. The key is to know when to trade, and when to avoid trading.
Usually, smaller accounts need more significant risks and more trading whereas bigger accounts require smaller risks and less trading.
We always put extra effort toward providing accessible, factual analysis. The point of these analyses is to give you excellent trading opportunities and, as the saying goes, to “teach a man how to fish”.
In time, you will also learn price action – hopefully, our materials will prove helpful. It doesn’t matter if you trade systems or prices, you will surely benefit from price action. All you need to do is follow the tripod of successful trading – it won’t be long until you begin to see positive results.
2. Release the Feelings
Every trader comes across a situation when there are trapped feelings inside, trying to break free. It may sound a little overly poetic, but it’s true.
Being a good trader means being able to release those feelings. The way to do that is to turn the traditional way we react to negative thoughts on its head. Instead of resisting a belief, you need to feel it entirely.
Eventually, it will dissipate the negativity – and after some time, it just fizzles out. Bottom line is this – even if you don’t fully believe you would succeed, act as if you do.
A positive affirmation can work wonders for your confidence, but don’t forget that there’s more to it than just believing.
After all, actions do speak louder than words – but they also speak louder than thoughts.
3. Trust Your System
The beauty of Forex trading is that there are so many trading opportunities, so you will never feel void of setups. Let’s say you have difficulty finding good positional trades or countertrade opportunities. Why not trade breakouts instead?
We’ve come across traders who only trade breakouts – and they’ve had great success with it. However, keep in mind that you can only switch to breakout trading at a specific time of the day.
The crucial thing is to trust your system and believe in yourself.
4. Forget About Revenge Trading
If you fall down the negative spiral, you will spin endlessly – one bad trade after another.
It will be a never-ending cycle of you hoping for a good trade and resorting to revenge trading to get your money back.
In the end, you may possibly blow your account in a matter of days – or even hours. Maybe the reason for your loss is a spiral of doom? If so, what you need is a positive spiral.
To bring back belief in your trading, you need to organise a daily routine. When you set aside time for deliberate practice, you reprogram yourself. In time, this practice will become your second nature.
Moreover, when that happens, you’ll reap the sweet fruits of your labour.
5. Never Underestimate the Market
No matter how good your system might be, the market is always ahead. Trust me; you want to follow it, not chase it. In trading, you can do everything right with every single element of your system in place and still have losing trades.
As it is with every business, you need to accept losses. Accept them. This is one of the best strategies for consistent profits as it helps eliminate the gambler inside you.
This concept may sound easy, but it’s not. Forex trading profits are difficult to make. As a kid, you were told that if you did everything right and studied hard, you’d do 100% on your test. Well, it’s not the case when it comes to trading. You have to reprogram your brain to embrace how trading works.
The truth is, there is no ultimate way of trading that would allow you to win on every trade. However, you can win often enough to make a real profit. I have seen traders abandon their accounts over and over again in an attempt to not lose.
They keep thinking that it’s coming back. When it doesn’t, they blow their account up, which is a huge mistake. It’s just a waste of time and money. Make sure to appreciate a stop loss if it hits, then move on.
6. Drop the Risk
Proper risk management is a critical part of skilful trade management. You would ideally want to risk between 0.5 % – 3 % of your account on any trade. If you risk more, it will be much harder to come back from a loss. The drawdown can get you into a spiral of doom and revenge trading.
Also, traders can’t take the heat of too much money being on the line at a time. As a rule, a person can’t handle the pressure of what would be a significant loss if the full loss was taken.
Cheers and safe trading,