The journey to become profitable in Forex Trading can be long and painful. This is where the followers get left behind, and the leaders come to the fore.
This guide is the beginning of your change of fortunes, the perfect foil for your determined efforts to making a booming year for your trading adventures. Here are five secrets you should consider if you are thinking to improve your trading in the coming These are the most important pillars of every successful trader.
Trading Journal is a crucial tool for every serious Forex Trader. For starters, a trading journal gives a historical perspective to your trading activity, helping you summarize the trade. Important information such as the currency pairs that work best for you, the frequency with which you traded in a past period, per trade success, and time frames that yielded best profit percentages, can be accessed anytime from a trading journal. This makes the trading journal a personal database from which you can learn and discern intelligible patterns, which can help you progress your trading skills, and avoid making same mistakes again.
A trade journal also lets you record your personal goals and expectations from every trade in the form of notes and comments. This helps you control and plan each trade exceptionally well, and in a result-centric manner. Plus, over a period of time, your trade journal will capture enough data to help you work out and verify your methodologies of trading. All these benefits significantly improve your chances of faring well with forex trading. Trading Journal might not be time consuming or hard work at all.
Even simple excel spreadsheet or WordPress blog can prove to be very efficient to track and record your trading. Simply put, your trading plan is your Bible, the rule book governing your trading decisions. Specify your entry and exit criteria and your money management goals in your trading plan, and stick to it religiously, of course, the assumption is that your trading plan is made after thorough deliberation and testing.
Technologies like simulation tools help you put your trading plan to the test without risking any real money. If the results are good, you can implement the same in real world scenarios. Also, simulation tools help you stress test your trading plan, by emulating market conditions similar to financial crises. These tests yield massive insight into the flaws and strong points of your trading plans.
Remember, as a serious forex trader interested in long term gains, working without trading plans is like rowing upstream without your oars. In fact, every successful trader has a well-guarded and customized trading plan, a rule book that they keep on fine tuning as they gain more market insight and verify the credibility of their trading methodologies.
Your trading plan must change over time together with changing markets. The important thing is to remember that markets are constantly changing. Your plan must adopt to new conditions and improve over time. Make sure you test all hypothesis and have hard, statistically significant evidence of every test you perform.
A quick look at any financial news daily is not enough to succeed in this game. Master traders always analyze market developments in terms of their impact on parameters like GDP. Plus, they are always able to make more sense of important macroeconomic policy changes such as interest rate revisions.
Ensure that, not only you understand these concepts, but also you know how that data is reported to the markets on weekly basis and does it impact every currency. Every serious Traders must follow weekly Risk Event Calendar. Risk calendars are vital tools in the hands of forex investors that can help prepare them for the upcoming buzz in the market, so that they can analyze and suss up the situation, and plan their moves to land up on the right side of the movements in the market.
For cutting edge insight, forex traders can follow all meetings of the Central Banks, and can make informed estimates of the decisions likely to be made, and their impacts on the market.
The official website of the central bank is a ready source for meeting minutes. Financial news websites also publish copies of these minutes after they are publicly released by the banks. Smart investors can pick up hints and cues, and can detect the pulse of the economy from the minutes, and can foretell events such as interest rate revisions, inflation control measures, etc. The Commitment of Traders report COT is a valuable insight into the activities of large institutional traders, who collectively have the power to influence the market.
The Commodity Futures Trading Commission provides thus report every week, helping traders assess the stand of large institutional investors, and plan their market moves accordingly. This report is a fair indicator of the degree of commitment that traders have for trends in commodity markets. Just like any traditional technical indicator, the COT report can be used to analyze time and price, and to understand whether traders are net short or long, and also whether they are bullish or bearish.
Based on shifts in sentiments of investors, traders in money markets can foretell flips, and can hence plan entries and exits to record net profits. Long term returns in money markets are a direct function of your propensity to gain knowledge and experience, and your ability put in the long hours to track and assess market movements. Core fundamental knowledge of macroeconomics concepts, analytical skills, access to and ability to use financial tools and simulators to quickly and accurately devise short term trading tactics — all are the keys for success in forex trading.
I truly believe the journey to profitability and freedom is a function of hard work, commitment, persistence and boring routines There is no magic to trading.
I believe in making calm rational decisions what, when and how to trade based on a decade of intense learning. Sent email to you and Tanker Trackers because your C. Report is incredible — maybe you can help them sort something out with Oil?! Or maybe you could do it?! You must be logged in to post a comment. Forex Blog 1 Comment. Testing your strategies is crucial for your plan to work. Understand Macro Economics A quick look at any financial news daily is not enough to succeed in this game.
Follow Risk Event Calendar Weekly Every serious Traders must follow weekly Risk Event Calendar Risk calendars are vital tools in the hands of forex investors that can help prepare them for the upcoming buzz in the market, so that they can analyze and suss up the situation, and plan their moves to land up on the right side of the movements in the market. Follow COT Report The Commitment of Traders report COT is a valuable insight into the activities of large institutional traders, who collectively have the power to influence the market.
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