Tag: Trading Skills

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Beginners Forex Education Forex Basic Strategies

Top 10 Ways to Improve Your Forex Trading Skills

We are always on the lookout for new ways to improve our trading and the results that we are achieving. We have probably tried a lot of things in the past that have either worked or not worked. Instead of just throwing random ideas out there, we are going to be looking at 10 of […]

We are always on the lookout for new ways to improve our trading and the results that we are achieving. We have probably tried a lot of things in the past that have either worked or not worked. Instead of just throwing random ideas out there, we are going to be looking at 10 of […]

We are always on the lookout for new ways to improve our trading and the results that we are achieving. We have probably tried a lot of things in the past that have either worked or not worked. Instead of just throwing random ideas out there, we are going to be looking at 10 of the things that have worked and have been successful in improving our overall trading. Some may be big things, others very small, but the important thing is that they have the potential to make us a better trader.

Keep a Trading Journal

One of the biggest and best things that you can do is to start a trading journal. A trading journal is basically that, a journal where you write down things that you do, your entries, exits, time trades are open, profits, losses, and more, pretty much everything that you do and the reasons for as well as the results of what you did. It sounds like a lot, but once you get used to it you can fill it out pretty quickly, and once you do it is an invaluable tool. You can use it to find out what you are doing well as well as what you are not doing well or where you are deviating from your plan, this then allows you to make adjustments and then ultimately improve on your trading.

Ask for Feedback

Feedback can be a powerful thing, especially when it comes from other traders. Often when we do something we have a sort of tunnel vision, we see what we want to see and the things that we do have a nice rosy tint on them. Getting feedback from someone else, outside of your own views will give you a new perspective and they may be able to see things that you are doing wrong or that could be improved that you could not. Sometimes it can be hard to take criticism on what you are doing, but accept it and work with it, it is a great way to improve your overall trading.

Practice

A pretty simple one, but practice does make perfect after all. Make sure that you have a demo account available for you to use, this demo account is where you can practice your new strategies or trade ideas, it lets you try things without any real risks to your capital. It is always good to use a demo account, to begin with before you try something for real, so take advantage of one whenever you can.

Budget Your Funds

The old but gold rule of only trading what you can afford to lose. This may not improve your trading directly, but it will certainly help with your mentality. If you are trading with money that you actually need then you will be putting yourself in a situation where you will feel increased levels of stress, this can then lead to bad trades being made. Instead, if we are comfortable with the money we are risking, then we have a much clearer mind and so can concentrate on our trading far better.

Watch Successful Traders

Now, we need to be clear that we are not meaning that you should simply copy other successful traders, that won’t benefit you at all. Instead, you need to look at what sort of things that they are doing. This can then give you ideas on how you can adapt your trading. The things that they are doing are clearly working, so why not try and implement some of those things into your own trading strategy? It can help give you new ideas to improve but be wary about simply blindly copying, that will only lead to losses due to you not fully understanding what it is that you are doing.

Watch the News

This does not have to be on TV or in a newspaper, there are plenty of economic calendars out there on the internet that will give you an idea of what economic news events are coming up and the effects that they could potentially have on the markets. Take a look at these each morning and it can give you an idea of what you could trade or what you could avoid. Keep it in mind when you decide which currency pairs to trade, as high volatility news events could increase the risk on certain currencies.

Try New Strategies

You have your strategy that is working which is great, but there is no harm in trying something new. The strategy that you are using is working for the current conditions, but when they change, it may not be quite as effective. Learn a new one or two, something that you can use when the markets change, not only that, but it will also give you a new view of the markets and even ways to improve your currency strategy. Just try not to go crazy and learn too much at once, this can cause you to get confused and mix them all up.

Ignore Rumors

Rumors are out there and they turn up a lot when it comes to forex and trading. People shouting about how well a currency is going to do, or that an asset is going to collapse. Yet these things very rarely happen. If you are on social media, then take absolutely everything with a pinch of salt. If you are going to look for news, then look at a reputable site, not random people over the internet or sites that are set up for clickbait. This way you can avoid making trades or not making trades based on false rumors.

Use Indicators

Indicators can take a lot of the work out of forex trading, by this we simply mean that you no longer need to do some of the analysis that you otherwise would have. They do not take it all away, you still need to read them and then work out what the data shows, but it can certainly speed up the process, it can also help to eliminate some of the human errors that we have when we read and analyze things. The data given will be more accurate and will be presented a lot quicker than if we were to do it ourselves.

Be Confident

Confidence is a great thing, you need to believe in what you are doing, if you do not believe in yourself then you will end up being reluctant to place trades, not something that will make you much money. Believe in yourself, look back at your history to see how well you have been doing, just try and ensure that you are not getting overconfident this can lead to bad trades, so just believe in yourself but be sure to keep your feet on the ground.

There are ten different ways that you can improve your trading, there will of course be a lot of other things that you can also do, each and every trader will be different with different ideas and different abilities, but there are some things that work for all traders. Try and do as many of them as you can if you aren’t already, and you should hopefully see an improvement in your trading results.

 

Categories
Beginners Forex Education Forex Basics

Why You Should Focus on Improving Your Trading Skills

Well, understandably, there are quite a few practical benefits you get from polishing your skills in trading:

Well, understandably, there are quite a few practical benefits you get from polishing your skills in trading:

Well, understandably, there are quite a few practical benefits you get from polishing your skills in trading:

While these are just a few perquisites you get from improving your trading skills, you should ask yourself what it is that you feel comfortable with or that you really need in your life.

Some people are fine with doing things halfway. They are at peace with what they have and they are not looking for more.

If you are not one of them, then great – we are going to go deep today.

Ok, so the first step is always to see what type of trading you are interested in.

This is a crucial point because depending on your trading style, there are many additional questions we can ask. For example, if you are a naked chart reader, we would not be focusing on your ability to test different indicators but on your ability to understand what the chart is suggesting.

Most of the time people don’t make any changes because everything is going well on the surface. As Idowu Koyenikan said, you must have a level of discontent to feel the urge to want to grow. Still, do we need to get there? Do we need to take a major loss just to see that something in our system is not working? It’s like with beginner traders who manage to get some unbelievable returns month after month only because of reckless money management. This, of course, is never sustainable and, just because they lack experience and don’t listen to experts, they face the consequences of their actions and choices real soon. 

You don’t want to get more than you bargained for and you don’t have to suffer. You need to be attentive to what your style of trading requires.

Therefore, the next step would be to see how you understand risk and how you manage it. This is vital for trading because, as a trader, you will soon learn that it’s not about winning but protecting your account from losses. The better you are at keeping your leverage balanced, the more in control you are of your emotions, but we will discuss this aspect of trading soon enough.

An excellent way to mitigate risk is to diversify your wealth structure (portfolio). As a trader, you have many different options – you can trade forex, stocks, bonds, ETFs, and so on. We cannot predict market behavior, but we can all agree on one thing – change is the only thing we can be sure of. The more you expand your portfolio, the further you are from putting all of your eggs into one basket. 

Now, to get to this point and level of expertise, you do need to invest in your analytical skills. And, even if you say that you are more of a learner from my mistakes type of person, you truly need to acknowledge your ownership in your growth. It simply isn’t enough to say that you made a mistake. The trading world is not that forgiving and your account will prove it sooner or later. 

So, how can we work on our analytical thinking? We journal our trades and we commit to backtesting and forward testing with diligence and a sense of purpose. You don’t have to like it but you do have to recognize its potential for it to work on a regular basis. Your notes are your strongest weapon because they help you track your progress, make conclusions, and think of additional tools, indicators, and strategies you can include in trading to improve your system and render better results. 

Also, make sure not to be too quick to make changes. Developing one’s skills is a process, not a pill you can take for everything to turn to gold. If you see that your trading plan is making you feel concerned, you should give yourself some space and base your judgment on a bigger sample size. You need more trades and much more notetaking to make such vital changes in your trading.

This, of course, will teach you how to do research. In the same way you had to discover different resources on how to trade, now you need to be a detective and investigate how your actions and decisions generated specific results. This process does not have to be dull if you don’t build up unnecessary tension inside and attach negative meanings to it. This approach will help you tackle one of the key trading challenges – ensuring that you have fewer, not more, losses. What you come up with after such research may differ from other traders, but it is nonetheless relevant for you as we are all essentially different people.

Additionally, as traders, we really need to develop an insight into what the market needs. We may think something is relevant but if our everyday trading experience points at some other areas or skills, we cannot turn a blind eye and expect the problem to resolve itself. Similarly, we should strive to learn the conditions under which the market is the most permeable and agreeable with what we aim to achieve. For example, you should learn that unfavorable periods, such as elections, are there to be avoided because we do not need any excess volatility; we need flowing waters and a supportive breeze, not full-blown hurricanes, tsunamis, and volcano eruptions. Unless you adore these risky opportunities.

And, last but not least, you should really devote energy and attention to understanding yourself. Traders are often their own greatest sabotage. If you don’t know what you react to compulsively and why you are like a baby on its own – innocent and dangerous to yourself. Luckily, we are very predictable beings, so if you just take a little time and focus a little more on your emotional reactions, you can learn a great deal about what you do to hinder your personal development and financial growth. Psychology is a fundamental step in becoming a professional trader and ensuring a consistent money flow.

Still, remember that even if you can tick all of the points we listed at the beginning of this article and throughout the previous paragraphs, there is always room for improvement. Often we procrastinate to a large extent because we feel that what we need to do is big – sometimes in terms of the time and effort, we need to invest and, other times, in terms of the importance of what needs to be done.

In case you didn’t know…

We want things to be so perfect, but what we don’t understand is that this lack of confidence won’t go away unless we do something about it. And, the more we push things aside, trying to ignore whatever seems to be bugging us, the more they resurface. It’s like with the Hydra, the monster from Greek mythology – if you cut one head off, two more would grow back immediately. This is how you alone let yourself play out a part in this vicious circle.

Now, we have two major contemplative questions for you:

Who benefits from you staying in this loop of never progressing?

What is bigger – the fear of success or fear of failure?

The psychological benefits are no less impressive or significant than the increase in money in your account. Always keep in mind that what is essential is invisible to the eye (Little Prince).

Trust the process and trust yourself. 

Still, if you ever feel overwhelmed with the improvements you need to make, just take one thing at a time. Take that notebook and write down one—three things that you can do each day to improve your trading skills. 

Good luck!

Categories
Forex Basics

What Are the Best Soft Skills for a Forex Trader Develop?

Soft skills enhance our abilities to adapt to our work environment and enable a smooth exchange of information or services. While traders are not standard employees one can find at a typical workplace, they still need to exhibit skills related to personality, attitude, flexibility, and motivation, among others. As forex trading is a rather solitary […]

Soft skills enhance our abilities to adapt to our work environment and enable a smooth exchange of information or services. While traders are not standard employees one can find at a typical workplace, they still need to exhibit skills related to personality, attitude, flexibility, and motivation, among others. As forex trading is a rather solitary […]

Soft skills enhance our abilities to adapt to our work environment and enable a smooth exchange of information or services. While traders are not standard employees one can find at a typical workplace, they still need to exhibit skills related to personality, attitude, flexibility, and motivation, among others. As forex trading is a rather solitary endeavor, unless you are overly dependent on your Twitter forex community or your trading coach, you still need to develop such skills despite the lack of interpersonal contact.

Unlike hard skills, the soft ones cannot be mathematically measured, but their quality lies in their ability to increase traders’ potential to see benefit from trading. Many traders who failed in this line of business attempted to approach forex in a simplified fashion, downgrading it to betting and, hence, substantially affecting the end result. Therefore, to be able to understand forex and ensure prosperity, adopting a variety of soft skills is a requirement. Since trading currencies is a unique sort of business, we are going to highlight the skills that have proved to fortify healthy practices, boost self-development, and increase returns. You will find this article to be divided into three major sections that comply with the natural progression of every trader’s experience, which you can use as a guide to monitor your own development and ensure profitable trades in the future.

Stage 1: Learning

At the very beginning of a trading career, each individual intends to find proper learning materials that would best support the acquisition of new terms, understanding of the market, interpretation of charts, and acquaintance with concepts such as strategy, indicator, and algorithm. To be able to facilitate this educational process, you will need to exhibit the willingness to learn and employ research skills extensively. In addition, to further build resourcefulness, you will also need to make use of critical thinking to be able to discern whether the information you obtained is applicable or useful. Some people like to be creative in terms of how they adopt the knowledge, so they will use post-it notes or turn to drawing, thus showing their eagerness, motivation, and respect towards education.

If you learn how to value the opportunity to learn, you will much more easily go over all other stages of trading development because every step is a part of a bigger process that takes time, patience, and effort. Last but not least, you will need to start seeing yourself as an entrepreneur and demonstrate leadership and management skills so that you can properly assign times of the day/week when you will focus on learning, regardless of other responsibilities you may have. While intrinsic motivation is quite rare, exploit curiosity and envision your goals and potential changes that can support a balanced learning routine and reveal the importance of building forex education.

Stage 2: Practice

At this stage, traders are creating a demo account, through which they can practice technical analysis and fundamental market analysis as well as test their strategies and algorithms. As can be seen from the previous sentence, analysis is a vital skill, which can help you learn how to determine when and how exactly to enter and exit trades. By demo trading, you are testing your ability to make tough decisions and manage situations independently. While some people may find it easy to draw the line, others will come to realize that they lack emotional preparedness and confidence to proceed with a trade or to end it. This phase is ideal for reflecting on your emotional intelligence where you will need to show honesty and courage in determining how your own emotional responses affect your overall trading. Being sincere with yourself will also allow you to make necessary changes that can only help you down the line.

Of course, to be able to track your progress, you will also find journal keeping to be an absolute must, where the skill of discipline can help you build a proper routine. Lastly, understand that each trade is similar to a project, where you are the project manager, responsible for the technical, the emotional, the budgetary, and the organizational side of things, and it is thus also your duty to monitor whether each step is taken at the right time. If we overinvest and disregard the alarming risk levels, our projects will fail. However, if we invest too little, these projects will never come to fruition, so we need to exercise control as well as money and risk management. Remember that the ability to adjust to new circumstances and balance other life roles and responsibilities will also determine how well you can direct yourself, plan your strategy, control your emotional responses, and build your trading stamina. 

Stage 3: Professional Trading

The last stage, or the stage where you are finally ready to trade real money, is the moment when all your skills and knowledge of trading psychology will be tested. By now, you have already shown dedication, persistence, attentiveness, resilience, humility, the openness to change, and the ability to be corrected and trained, among others. Here you will need, more than ever before, to show faith in your system, regulate your compulsions to make changes in the middle of a trade, and monitor your risk and money management so as not to overexpose for example. While you may have a plethora of other responsibilities, you will demonstrate the skill to work under pressure but with a clear mind, which may require you to follow expert directions on how to relax and prepare yourself mentally/emotionally before trading.

Since real money trading tends to awaken our deepest fears, you know that you may at times need to build your attitude more devotedly and work on your positivity, and you should find comfort in knowing that have already proved to be able to troubleshoot anything that needs fixing. Remember to employ critical observation skills when it comes to assessing your technical skills, results, and psychology, but also strive to nurture tolerance and accept your flaws as areas where you can keep growing and enhancing your trading experience.

While forex does imply a different and possibly either stricter or more lenient schedule, depending on what reality you are used to, use your soft skills to perfect your technical skills and maximize your returns. Not everyone finds it easy to plan and strategize although every person needs to bear the responsibility for overcoming his/her shortcomings. Intrinsic motivation, control, determination, and critical thinking can get you far, as long as you accept the role of being your own leader. As you can see, leadership and management, together with all other skills, need to be used comprehensively in all areas of trading development. Therefore, these skills are not stage-exclusive, so the skills we use at the very beginning will probably need to be used later on as well.

Motivation is equally necessary for the early stages of trading where everything is new and complicated and later on when we need to record each trade to be able to track our progress to ensure sustainability. If we desire to build a lasting forex career, it is vital that we think of currency trading as a real job where we have the executive role. And, even though we do not have different people to manage, we have just about the same handful of duties trying to balance different sides of our personality, our goals, and technical knowledge. To summarize, in order to build your trading skills and increase your profit, you also need to develop soft skills that will allow you to control yourself and your trades, keep journals regularly, invest in practice and troubleshooting, support proper money management, and fortify your sense of responsibility regardless of your life circumstances.