Being new to Forex can be exciting, there is this whole new world out there of financial markets that you know in the back of your head can make you rich, but it’s all very complicated. We have come up with some habits that it would be good to get into as a newcomer to trading, they may not work for everyone, but even incorporating one new habit into your trading, can make a world of difference.
Finding Your Strategy
There are hundreds if not thousands of strategies out there with all sorts of strange names. If you tried to learn them all, you would either be the smartest person alive, or the information would all become a muddled mess within your head.
You need to be able to find the one strategy that suits your own style, it may take a while to get it right, some traders it can take weeks, other years, but testing out various strategies on a demo account, as soon as you find one that you seem to take a liking to, learn more about it, learn it inside and out and use that as your future baseline. Using the same strategy regularly helps you hone your skills, and also helps to prevent the mistake of getting into the market with no knowledge of the current conditions or knowing where to exit.
Use Stop Losses
This one probably seems obvious right? You would be surprised at how many traders (both new and experienced) trade without stop losses. This is technically a form of gambling rather than trading. When you are new, you most likely sit around watching your screen to see how the trade is doing, I know I did and I am sure most newer traders do too, this may lead you to believe that because you are watching the markets, you will be able to get out when you need to.
This is a mindset that you need to grow out of, the 60 seconds that it takes you to run to the toilet, or a sudden unforeseen news event can bring your trade into losses very quickly, the human mind will always doubt itself and you may stay in the trade, seeing it move further and further into the red. Having a stop loss means you are only risking a certain percentage of your account on each trade, rather than the entire balance without a stop loss. The stop loss saves accounts, so be sure to use them.
Record Your Trading
When a trade goes well, how do you know that it did? When a trade goes wrong, what caused it? These are a thing that you should be recording, it can seem like a daunting task, people used to write down everything, each entry, exit, movements, profits, losses, and more which is a lot of work. Luckily there is now some software that can do most of the work for you, be sure to use one, seeing your full history is a fantastic way to learn from your mistakes and to ensure you know exactly what is working to improve and better replicate those results.
Set Time Each Day
Trading needs to be seen as a job, while the markets are open 24-hours a day, it does not mean that you need to be trading it at all times, no one wants to be sat up at 3 am staring at the charts hoping something happens to match your strategy. Give yourself an allotted time each day, an hour or two in the morning, a couple of hours in the evening. This was you begin to work yourself into a routine, eventually, you will work out (by using the records stated above) what times of the days work best for your strategy, working only those times will keep you fresh, give you a clear mind, and you won’t feel bored or overworked, it will also ensure that you are free from distractions and can fully focus on your trading during these times.
These are just a few of the great habits that you could look into, getting your own routine which incorporates healthier trading conditions are always a positive thing to attain.