The phrase that you most likely would have heard plenty of times throughout your life is that practice makes perfect, but we are here to tell you that this is not the case, especially when it comes to trading when you can never actually be perfect, you may have a perfect trade every now and then, but you overall as a trader will never be perfect. This is not to say that you can’t be great and that you can’t be consistently profitable, of course, you can. What war referring to is the definition of percent: “having all the required or desirable elements, qualities, or characteristics; as good as it is possible to be.” No one can be perfect, there will always be things to improve on and there will be mistakes being made.
This is all very normal, so instead of looking to become perfect, why not look to develop habits, habits that make things easier, habits that ensure that you are doing things the right way, or at least the way that you are meant to bad on your strategies and plans. What we need to be careful of though, is developing habits which do not help us, if we are consistently doing something wrong then it is not going to be good for our overall trading is it? Programming your mind into doing something wrong can make it very hard to change it in the future, so it is important that we get this right from the start.
So let’s look at some of the things that you can do that will help you to develop some good habits that you can start doing straight away.
Start with the basics…
It’s logical to start from the very beginning with the core trading skills and so that is where we will begin. You need these basic skills in order to be a beginner let alone an expert. You need to get yourself a good understanding of different currency correlations, basic economic movements, learn how to identify trends and chart patterns, and to then learn and know the ins and outs of managing risk, which is a big one and something that is paramount to your success as a trader.
It is vital that you do not try to take any shortcuts when doing this first step, you need to be able to perform all of these things easily and quickly. So continue to practice them, you need to be able to do them without really thinking about them, once these have been cemented into your head it will simply come naturally to you when you go to do it for real each time. This is simply building the foundation for the rest of your trading so it is important that you get it right.
Test your skills…
So we have some knowledge and understanding, but we need to be able to test this somehow and the best place to do this is on an account with live conditions. Of course, you do not want to jump straight in with your own money so we need to take a look at a demo account, you should be using one of these to practice for quite a while before you go with your real money, and also back to the demo account any time ta you make changes to your strategy.
For those just starting out, you need to use the demo account in order to help establish some routines, these routines should allow you to identify different trade opportunities, and in order to place trades. You need to test them and practice them in different trading conditions such as quieter times, times of high volatility, trending markets, ranging markets, and more. Ensure that you are logging any results that you get into your trading journal so you can easily look back at them and analyse them to find out what has worked and what has not worked.
Once you have your possessor working out (or more than one) you can then start to think about going into a live trading situation, start by taking very small trades, get comfortable with what you are doing, and the new emotions that come from trading on a live account. You are now risking your own money so it is important that you try to stick to the routines that you created within the demo account, ensure that you are consistent with them and that you are doing it consistently across the different trading conditions that you are experiencing.
Create a feedback system…
The last thing that we are going to talk about is the creation of a feedback system, this is a way that you will be able to see exactly what it is that you are doing and how effective it has been. There Is no point in doing something if you are not able to measure how successful it has been, this will also be a way for you to work out exactly what needs tonnage and the best way of going about that change.
By practicing, analysing and then adjusting and adapting your trading will quickly hasten up the learning process. It will make things a lot easier for you in the short and long run. If you notice something that is consistently holding you back, change it, and test again, keep doing this until you are happy with your progress and your current trading. There Will always be things to improve, you will never be perfect but with each little change, you are gradually making yourself a better trader. You can do this in the form of a trading journal which is something that you’re probably tired of hearing about now. Jot everything down in this little journal and you will instantly get feedback on what it is that you are doing, a vital tool for the future of your trading career.
So those are some of the things that you can do to help you gain some good habits that will ultimately help you to become a better trader. It is a good idea to start doing these as soon as you can, if you are already partway into your career then it is not an issue, you can still work on these things and you can still create those habits that will help you on your journey of becoming a great trader.