Do you remember back when you were just getting your feet wet with trading forex? Now that you’ve jumped in and are swimming with the pros, stop for a minute to look back at how far you’ve come. What can help you get ahead? By developing specific traits, you will have a better chance of using your strategy more effectively. Here are three traits that you can work on strengthening.
Being Flexible Where Needed
As you probably know by now, no two days of trading are the same. So if you are trying to stick 100% to your own charts or strategy, you might not get very far. Textbooks are great for learning, but once you’re trading real money, you will need to learn where and when you can bend the rules. To be successful, learn how to use your strategies in every market situation. If the market is strong, weak, volatile or not – know how to adapt to the changes and use them to your advantage. Take a quick survey of the market for a given day and then decide on a winning path. And if the situation doesn’t look good, then stay away for a day. Not trading is also an option.
Thinking ahead is a crucial skill when playing chess, and the same skill applies when trading forex. You take everything you have learned up to a certain point and see how it will fit into a real-time scenario. For instance, you need to know how currency has been traded in the past, what events might trigger movement and how the trends have shifted. In order to use that information in today’s market, you need to hone the skill of looking ahead. From history, think about what the next move might be and calculate how you can benefit from that move. As you watch your screen, you will receive trend and movement updates. You’ll need to understand how to grab those tidbits of information and use them to your advantage in the current market. As you are making a trade, think through the steps that will happen, in order to concentrate on the price action. Go through the strategy and be ready to pounce. When the right moment to enter a trade hits, you will be ready. As in chess, make the move that makes the most sense at the very second you’re entering the trade.
Learn from Experience
By now you already know the importance of keeping a trading journal, but even more important than having one is using it! If you have been detailing each trade in your journal, then you will have a goldmine of information that you can learn from. Were any of those trades that are recorded in your journal bad ones? Great! Figure out where it went south and don’t repeat that mistake! The same goes for profitable trades. Your own trading journal is one of the most important tools you have at your disposal, so take advantage of what you can glean from it.