Trading requires continuous learning, patience, and commitment. But there are several other aspects of it you need to take into consideration.
1. Adapt your trading plan to the new reality
Every new year has to bring something new to the table for everyone. It should turn into an opportunity to create new goals, set bolder objectives, while trying to grow from both personal and professional points of view.
Trading is no different. So, what can you do about it? You can start by refining your plan of action because your knowledge and skills would have grown in the previous 12 months.
Make sure you stick to this updated plan once you get it done. It’s your chance to get rid of all the bad habits holding you back during trading and fine-tune the good things, which showed positive results.
2. Pick one trading strategy that you feel comfortable with
In case your current #trading system and strategies didn’t work as you intended, maybe you could try something new, like testing how a single trading strategy performs. This way, you can master it a lot faster than if you were using multiple techniques. When you feel confident enough with what you’re doing, you can look for another strategy that fits your style and integrate it into your approach.
Various strategies perform differently depending on the scenarios and markets you make use of them. To find out what may be suitable for you, check out this article about types of traders!
Discipline and psychology weigh heavily in every trader's life, impacting how successful his strategies could be. Learn the recommend self-control tips & tricks, including how to overcome fear and contain greed.
3. Keep working towards removing bias from your trading activity.
Now the next thing we’re about to tell you involves practice, patience, and plenty of perseverance. For optimal results, your trading decisions must be unbiased and devoid of any attachment. This could seem impossible to achieve, but with enough commitment, you'll get there eventually.
To help you, experts advise against giving in to external influences when you’re in a trade. Also, avoid checking all the time for confirmation for your decisions. Lastly, don't fall for the recency bias, either. If a group of people believes that a particular trend will continue to occur in the indefinite future, it will not mean it will turn out like this. Apply the same analogy to your trading: if you’re having a good month, it doesn’t mean it will last forever. Approach trading with care and don’t overdo it!
Remember that you have a plan. This implies you have setups ready for entry points and exit points in every trade (when to enter and exit a trade). Also, stop loss and take profit orders shouldn’t be missing from your trading system.
4. Don't focus too much on NOW; learn how to put things into perspective.
In trading, you have to keep your eyes on the big picture: how much you lose when you’re wrong compared to how much you earn when you’re right. The keyword here? Perspective.
No two trades are 100% the same. For this reason, people end up repeating several mistakes, including giving in to emotions such as greed or fear, overtrading, or switching to different trading strategies all the time. You can avoid all the above mistakes if you learn how to be yourself and stick to your plan and rules.
Also, tread carefully when you’re testing new ground. Trading opportunities can arise for the markets you’re already accustomed to as well. Liquidity and size differ from market to market.
5. Don’t rush things
Patience is a virtue. To successfully trade the financial #markets, you have to keep your positions open until they mature.
Some other advantages of adopting a patient mindset and taking everything slowly include developing a proper discipline and learning the power of planning in smaller steps.
However, taking it slow does not mean to miss some of the trades that you had planned. If you're not sure why we're telling you this, go back to the bias argument at number 2, and you will have the answer you need.
Trading involves a mix of patience, perseverance, and careful planning. Finding out the correct dose of each could prove to be the right thing to do. One thing remains certain: you might want to nurture those three traits and implement them in your trading psychology.
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