A lot of forex trading strategies exist out there. But since there are literally limitless possibilities with these strategies, it may just boil down to what kind of trader you are. That means you must have the right trading habits to make you a successful trader.
To be a cut above the rest, do the following tips and habits that can improve your trading performance.
Forex Strategies: Preparation
Before you kick off your trading career, you must be prepared for battle. In fact, it should be a given: you cannot trade properly without getting ready. Preparation is key to any kind of endeavour.
Consider Your Timeframe
As part of your preparation, determine a timeframe that fits your trading personality and temperament.
Basically, your timeframe will be shorter if you don’t want to have overnight trades. You’re more comfortable going under not thinking about any open positions.
Meanwhile, your timeframe will be longer if you’re willing to sit through days of monitoring and adjusting. Some traders use their weekend to research the market before they use the weekdays to trade.
Find the Right Methodology
Another part of preparation is finding the appropriate trading methodology. Your choices include buying support and selling resistance, buying or selling breakouts, and using technical indicators.
Whichever methodology you choose, it must provide you with an edge. Test it and see if it consistently works. Also, learn how back-testing works so you can test the methodology with historical data.
The Right Market and Security
There dozens of trading instruments out there for your forex trading strategies. They will fit your trading methodologies and timeframe differently. In general, however, it’s better to avoid erratic trading instruments.
Forex Strategies: Attitude
Your attitude and behaviour play a huge role in the forex trading strategies you use.
Have Unlimited Supply of Patience
Once you’re prepared and you’ve chosen a methodology, have the patience to wait for the right time to execute the trade. Follow what your trading system indicates for entry and exit. Never succumb to impatience.
Improve your Discipline
Patience and discipline are perfect together; they are your ingredients to success. Do not fall for the temptation of deviating from your strategy. If something looks promising, but it veers away from your plan and strategy, ignore it.
Or you can research it, and find a way to trade it without breaking the integrity of your trading system.
This one depends on the quality and reliability of your trading methodology. The more reliable your system is, the more you can be objective. You don’t have to be emotional when trading. In fact, you should avoid that.
Therefore, your system must be super reliable that you can feel confident acting upon its signal even when others tell you otherwise.
Have Realistic Expectations
Sometimes, the market makes huge moves that you won’t see them coming. But being realistic, you wouldn’t count on those sudden huge moves to make a quick buck.
Focus on achieving short-term, realistic targets that’s possible to achieve.