Improving Your Trading

Filed under: Learn Forex Trading |

Today, I’d like to provide a little checklist on how to improve your forex trading if it is not going so well. I will provide this in five simple, clear steps.

 

1. Treat Trading like a Business

Trading forex should not be “a bit of fun” like people look for at the casino. They are not bets, there to give you a bit of excitement. You really need to treat your forex trading like a business if you are to be successful in the long term. This means being objective, keeping records, being professional and organized, and reviewing your performances regularly. Each trade should be seen as a business transaction, and any losses should be seen as the cost of doing business.

 

2. Manage your Risk

It is important to manage your risk by only risking a maximum of 2% of your bank on each trade. 1% is better, and 0.5% would be a more conservative approach. You must learn position sizing to make sure that you don’t risk more than these levels.

 

3. Have a Plan

Having a plan is obviously essential to any traders’ success. My plan, if you have been following my “Daily Trades”, is to look for key support and resistance zones on the daily charts and then to trade price action signals at these areas. But whatever your plan, you must have one!

 

4. Don’t Over Trade!

Over-trading is a constant danger and it is something that has wiped out many people’s banks. Don’t try to “catch up” when you have had a loss. Stick to your plan (see 3!).

 

5. Keep Records

It is important to keep a record of all of your trades so that you can monitor how you are doing and make amendments to your plan if it is not going so well. Your maximum drawdown over a long period of trades is key for ascertaining your risk.

 

Well, that’s it! Five simple (or perhaps, not so simple) rules for improving your trading. I hope that helps a little. See you tomorrow.

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