Welcome back, I hope you have enjoyed all the previous articles and Forex strategy trading tips. In this occasion, I would like to talk to you about 5 powerful Forex strategy trading tips that I learned from a professional Currency trader I used to work together with.
Never chase a trade: If you have been trading for a little bit you almost certainly have previously missed out in a few good trades. This is a situation that every trader must endure, however; if you want to be consistent and a profitable trader you have to be sure you do not chase trades.
If you decide to chase a trade you will be more prone to commit mistakes. First, you need to recalculate your risk and money management parameters. Second, you will be susceptible to the psychological pressure of the market. Remember, when you chase a trade the odds of you actually generating a good amount of profits is considerably minimized.
If you make a mistake and take a erroneous trade close it immediately: I know a full time Trader who trades his family fund that use to commit this mistake. He would press the “sell” button instead of the “buy” button. He would call me and ask me what to do and this is what I told him every time he called. “If you take a trade by mistake, make sure you close it immediately, don’t let a small mistake turn into a large loss.”
Focus on the process not on profits: This trading trick change my perspective as a trader and as an investor entirely. When you concentrate on the amount of money you are making or losing you become more exposed to the psychological influence of the market.
The explanation for this is that as humans we percieve money in another way. We see $1000 as a loan payment or a vacation to the beach and as a result we are more likely to let our emotions control our trading. In contrast, your trading strategy and computers see $1000 as a number, a value from an equation that is used to achieve a pre determined result.
Focusing on the profits will required you to see your trading capital as a computer would, and that is as a mean to a purpose. Focus on your execution, money management, and trading strategy and your profits will increase substantially over time.
Learn from your mistakes and become a much better trader: Personally I believe that mistakes are an important part of any trader’s career. Committing mistakes allows us to make corrections and make changes to our trading as you go along. Every single profitable trader has developed the power to learn from his/her mistakes and enhance their trading from them.
Never become greedy and try to get back to the market: This has happened to me when I was a beginner. A couple of times I doubled my account in just about 2 months and when I started to lose some of my earnings I would not accept my losses. As a result, I was hoping to get back to the market by taking more trades. This only brought more losses and made me lose a part of my profits. When you try to get back to the market you are letting your emotions (and greed) take control of your trading. Emotional trading is the best way to blow up your account.
I hope I was able to enrich your trading career and motivate you to become a better trader.
I'll be posting more forex strategy trading tips and ideas on my upcoming articles.
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