Become a better trader – essential steps to success
It’s that time of year again!
The days left in 2018 are whipping by, and I want to take a little bit of time to reflect on the trading year.
And I want to take some time to gather my thoughts before we dive into 2019.
The markets take a natural break over the holidays – not much is happening so it’s not a reliable time to be day trading. The market liquidity isn’t there.
So it’s an ideal time to take a break.
10 New Year resolutions for Forex traders
Actually, these are relevant resolutions to make at any time of the year. Whenever you’ve been trading for a while, it’s a good idea to re-evaluate every six months or so.
We all started trading with goals. And in the business of life and trading, it’s easy for them to slip.
Don’t let that happen this year!
Here’s my top ten resolutions for you, dear trader:
1.Be more consistent
You know how it is, you have plan to watch the market for your trading set ups at set times per day.
You have a plan to stick with your trading set up for 6 months without chopping and changing.
You have a plan to only trade when you see your set up, and not get distracted by other crazy market happenings.
But the best-laid plans of mice and Forex traders…
It’s a good time to refocus and be consistent.
2. Try something new
Ok, that sounds contradictory. But I don’t mean just get distracted and jump into any old trade.
Try a new currency pair. Try a new trading signal.
Just remember to spend a decent amount of time learning the ropes. And then spend a decent amount of time trading your demo account.
Trying something new keeps you fresh and alert.
3. Take more trading breaks
Remember you’re human. You need breaks to prevent yourself from over-trading.
Step away from the screens and get outside.
Plan a regular time in your week when you’ll switch off notifications and do something totally different.
I don’t mean the school run while constantly hitting refresh. I mean something where you don’t think about trading at all.
4. Keep the trading education going
Maybe focus on a new skill, or learning a new trading set up, or get to grips with an indicator that you didn’t use or understand fully before now.
For me, (feels like confession time), it’s the Fibonacci retracement. I’m going to spending some time reading and see if it’s something I can use more fruitfully.
5. Take the chat on the trading forums with a pinch of salt
I mean, a healthy pinch of salt.
I love a good read through the Forex Factory threads but I also sometimes need to walk away for a while.
It’s a good idea to have real life friends who also trade. It gives a rounded, realistic perspective to some of the trading chat.
6. Re-evaluate your goals
This is a great time of year to think again about why you’re doing this work and what you aim to get out of it. Of course, we want to become better traders. But we need to be specific.
Does your trading experience match up?
Did you want to work less hours? Did you want to take more breaks?
Did you aim for better returns?
Does your trading plan need changing up? Don’t let yourself get stuck in a rut if it’s not delivering on your expectations.
7. Tidy your Forex trading platform
Take a fresh look at your trading platform.
Do you really need all those charts with all those indictators all the time?
Be selective – make sure you have the time frames you need and the relevant currencies. Too much clutter makes it harder to see price action movements.
Are you looking at changing broker? We use our Metatrader 4 platform downloaded free through Think Markets. And we wholeheartedly recommend them if you’re learning to trade. Or if you’re looking to switch to a broker with superb customer service.
8. Set a time in the week to look back
Of course, the most appropriate time depends on your location. For me, it’s Friday afternoon. The market is quiet and it gives me a change to look back and evaluate the week.
Were there set ups you missed? If so, why?
Were there winning trades you should have allowed to run further? What could be improved?
Many people like to do this at the end of the week to give a bit of market closure over the weekend.
But for some traders, they need a little bit of space before evaluating. If that’s you, then perhaps Saturday or Monday morning is a better review time.
9. Evaluate some successes…and some failures
Let’s keep going with the education theme.
Choose a couple of losses and a couple of wins from the previous 12 months. What went wrong? What went right?
Be brutally honest with yourself.
Did you keep to your set up?
Was your risk management correct?
Was your trading environment too distracting?
Should you have let your successes run further? What held you back?
Were there elements to your successes which are repeatable?
10. Read other things
This might be a surprising step for someone determined to become a better trader.
But trading has a way of taking over your life. And it can lead to over-trading and too much perfectionism over losses.
Make sure you have space and time to read more than Forex news or political and economic analysis. You need a creative life. You need inspiration from the rest of life.
After all, the goal of becoming a better trader is not an end in itself.