If you have been trading for any length of time, then you know that there is always room for improvement and making more money. Most importantly, you also know that there is always room for more wins and less losses. In this article, I’ll be sharing with you the things you need to do to improve your forex trading. If you are a beginner, then this is really important. If you are an intermediate of seasoned forex trader, you may already know some of these things. But, there’s nothing bad in a little reminder now and then eh?
See Forex Trading as a Business
Let’s face it; most forex traders treat their trades like some casual hobby. While it might be that to you, the truth is that taking it more seriously will help improve your bottom line. Even if you are trading for just 2 hours a day, do it seriously. See your trades in the light of a risk and reward. If you see all your trades as business transactions as against pastime and hobby, you will have a lot more wins and less losses because you won’t take some things for granted anymore.
Learn How to Adjust Position Size
If there is one thing you need to get under control now, it is simply getting your risks under control. Sadly, many people do not know how to do this and are therefore, accruing more losses than they should. Use position sizing to manage both risks and rewards on your trades. To be safe, ensure that there is the potential of a 200% or more profit. This will help drastically reduce your losses and generate more profit.
There are times when the markets will be completely unfavourable. During these times, you can be sure that trading will result in more losses than gains. Forex traders who trade during this phase are guilty of overtrading. If you haven’t been doing this, be sure to avoid it as much as possible. This shows an underlying greed mentality and is largely responsible for many beginner traders’ losses. While it is understandable that as traders, we want to earn as much as possible every given month, it is not worth it to keep spending money if we aren’t making profits. One more thing; over trading is more likely to occur when you get cocky after a string of wins or angry over a string of losses. Learn to calm down and take each trading day as it comes.
Always Have a Trading Plan
If there is one thing you must always have, it is a forex trading plan. This will help you remain rational and keep you away from emotion based trading. Predetermine how much you want to earn daily, weekly or monthly and stick to it. With a simplified set of strategies, you can gradually up your income target without the risk of overleveraging or overtrading.
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