There are dozens of useful and essential practices available which traders can embrace in order to take their trading to the next level. We believe that any trader who embodies these principles will create a more precise sense of direction when tackling the markets.
Never Give Up
An important measurement of success is persistence. Persistence on its merit is insufficient. However, a lack of it will lead to missing the desired level of success because of the poor efforts dedicated to the goal. Think of self-sacrifice, the willingness to postpone current enjoyment for future benefits. The motto "don't give up and keep going" is therefore very valuable, as long as it's accompanied with real action.
Accept the Business Risk
Most traders have a natural inclination towards avoiding losses because failures create higher levels of pain. In fact, one win does not compensate for the negative feelings attached to one loss. Traders, therefore, attempt to limit losses and try to close as many wins as possible. The outcome of this behaviour can be a disaster.
Why? Because traders start to accept many small wins (which runs the risk of being associated with a few more substantial losses). Eventually, traders reach a stage where they, for instance, win 8 out of 10 trades, but the two losses more than wipe out the profits. This is a classic example of winning the battle but losing the war.
Traders can only become consistently successful if they can accept losses as a natural part of their trading. Trading will always have ups and downs, both in price movements and in equity curves. Handling the associated anxiety is an integral part of reaching your trading goals.
Socialise with Fellow Traders
Talking to traders can boost your experience and knowledge because you often gather insights from more experienced traders. Now, you may be asking why a trader would bother to take the time for socialising? The answer is that traders generally love to share tips and tricks with co-traders.
Trading can be an isolated affair - reaching out to other traders helps satisfy your inbuilt human need for social engagement. You can also benefit from sharing your knowledge - as much as you can from learning yourself - because giving feels good. And lastly, of course, nothing beats talking about your passion, which is probably why conversations about market analysis, tools or methods quickly become lively.
Trading is the game of discipline. I would say that it is a long-term game of probabilities, and you are a long distance runner with the goal of remaining on the tracks for many years to come. As long as you are disciplined enough to stick to your trading strategy, and not be emotionally attached to your losses, you will tend to make more winning trades, rather than losing trades and may even net a profit.
Master your strategy. Improve it, but stick to core rules.
You have to know it inside and out, and have no doubts or questions about what markets should look like before you risk your money in a trade. You have to place traps that will make pips for you. Once the market conditions match your strategy criteria - you should set your trade, without fear holding you back.
Pick Your Trading Hours
Not every day is for trading. Sometimes you will see that the market is not moving at all due to bank holidays. Usually, around 12 AM, the liquidity is thin, and there is no point in opening any positions. Other days there might be an essential event so the market might be in a range. Sometimes not having a position equals having a profitable position.
The Forex market can be a very profitable place, but you must have a firm understanding of how to work within this environment if you intend to keep on winning, and therefore, It's always important to be aware of the risks involved with trading as well. No one can be successful each time he or she makes a trade, but don't forget that Forex is about stacking probabilities in your favour, and just by reading and adopting these tips, you may have just piled another 5 % chance into your favour.
This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.