Whether they’re experienced traders or can be classed as novices, one of the many questions which Forex traders have is how they can go about improving their trading and in turn how they can increase their chance of success. Of course, there is no such thing as a “sure thing”, however there are a number of steps which may be taken to maximise the chances of success.
Step 1: Analyse
One of the major elements which separate the professional trader from the hobbyist is the planning and the homework which the professional puts into their trading. In addition to having and perfecting their strategies, it is necessary to examine those strategies on a regular basis, analyse their success and above all, not be afraid of removing or modifying a strategy which is not working out or having the desired effect.
Step 2: Diarise
Unlike the stock markets, the Forex market can be traded on at any time: the timing of this is up to the individual trader and it may be that they prefer a certain time to trade or have a strategy which depends upon a certain country’s market. Therefore, being organised with trading times, diarising and being willing to trade at “out of hours” times is essential for success. Even traders who are happy to trade as and when they feel like it can benefit from a diary system.
Step 3: Use the Data
Forex charts, which are often available as part of a professional platform (such as the ones provided by www.FXCC.com) can be an invaluable tool in strategizing as they enable the trader to use all of the relevant data, including historical performance, when planning their next trade.
Step 4: Manage the Risk
When a trader is using their own finances, it can be all too easy for them to become emotional about their trades. However, the best traders are those who can separate their personal finances and emotions and their trading experience. Learning to manage the risk and be stoical about the wins and the losses can help the trader to lose the inhibitions which may be preventing them from making the right and necessary choices.
Step 5: Knowledge is Power
Those who are more likely to enjoy success in the short and long term are ultimately likely to be those who have taken the time to study and learn their craft. An education in any area is always useful but in Forex where a variety of technical terms and knowledge could be the key to success can never be underestimated.
Step 6: Beware of Overthinking
As important as education and analysis are in Forex, there is a danger of overthinking strategies to the point of destroying confidence and taking any sense of enjoyment out of the process. In addition, the traders who overthink their own way of trading are likely to be the ones who talk themselves out of making key plays which could lead to success, and find themselves too afraid or nervous to show the courage they need to when trading.