Seven Secret Strategies – A Guide To Trading
Many traders assume that if they spend enough time in the markets, analyzing charts, reading books and taking courses, their skill level will improve. You have to devote hours to it when you are first starting out. There is a lot to learn when it comes to trading the forex market. However, putting in more hours doesn’t always guarantee you’ll make more money, and it can reinforce bad habits if you consistently do the same thing and make the same mistakes. However, we spoke to industry experts and compiled this list of seven strategic attributes to help you get off to a good start in the industry. But, hush, don’t tell everyone!
- Mentor – Have someone in your life who holds you accountable for your trading decisions. Call this person your trading referee. Lack of discipline can fail anyone, so having someone in your life who holds you accountable can keep setbacks and mistakes to a minimum. This person can be a mentor, a coach, or simply a friend or family member; it doesn’t have to be a trader, but it can be. You want someone you’ve explained your strategy to and kept informed of your progress. Just knowing that you have to show someone your trades – and that those trades have to match the strategy you promised them to follow – is enough to keep most traders from making mistakes.
- Time – Day trading requires concentration and time. You will have to give up most of your day. If you have limited time, don’t even think about it. Day trading requires a trader’s ability to monitor the markets and identify opportunities that may arise at any time during trading hours. It is essential to be vigilant and to act quickly.
- Live practice – Trading a real-time trading system is one of the best ways to develop it. Too many traders find themselves trapped in the back-testing loop, spending all their effort tweaking and optimizing their methods on historical data. Back-testing, on the other hand, can’t get you very far because you’re still limited to the data you had in the past. There is also a risk of overfitting. On the other hand, by putting your system into production, you will learn much more about it than during the back-testing phase. You will learn how the system behaves in different contexts, how different order types influence results, and how news influences system performance.
- Evaluation – Even if the initial plan is not good, stick to it when you practice and you will progress in a targeted way to become a consistently winning trader. During the evaluation process, you will be able to critique your ability to follow the plan and the plan itself. Self-assessment involves reviewing all of your daily trades and evaluating how effectively you have followed your trading plan on each one. It would be a problem if you made a lot of trades that were not part of your trading plan. When looking at the daily chart, you may notice trades that you were supposed to take but did not take.
- Time of the day – Unlike the amount of time you allocate to trade, you also need to think about the actual times of the days you are going to trade, for example, as an end-of-day trader. The End of Day (EOD) method of trading involves trading near the market close. When it is evident that the price is going to stabilize or close, EOD traders become active. This method requires looking at price activity in relation to the previous day’s price movements. Based on the price action, EOD traders can then speculate on how the price might move and determine which indicators to use in their system.
- State of mind – Markets are amoral, which means that they are neither moral nor immoral. Markets have no emotions. Therefore, how traders perceive the market is entirely up to them. Let’s say your long-term goal is to achieve and maintain trader status. In this case, it is essential to cultivate a mindset that allows you to watch the market objectively. Will you stay calm during these events and avoid reacting emotionally? Your perspective will ultimately define your reactions to losing trades or big profits.
- be yourself – Why is it so necessary to determine your trader personality profile? Knowing what type of trader you are allows you to focus your time, energy and attention on implementing Forex trading techniques that work for you. Sometimes what works well for one type of trader doesn’t work and is a losing approach for another.