Just as there are rules and guidelines for foreign exchange trading methods when you are learning how to earn money on the forex market, there are also practices for managing the personal factors and habits that obstruct our success. Here are 6 golden rules for dealing with ourselves so that we can move smoothly from hesitant newcomer to professional forex trader.
1. Keep Cool
Experienced traders do not let their trading be influenced by their emotions or their emotions be dependent on their trading. They do not risk more because they are feeling like winning, they do not hesitate when the signs are right, or pull out of a trade too early out of fear. Likewise, they are unlikely to celebrate a gain, nor will they get mad, shout or kick the dog when they lose.
A person who is affected by his or her emotions will not make it as a currency market trader. Self discipline can be learned but make sure that you have fully mastered your emotions on a virtual account before you think of going live. If you are still taking uncontrolled risks you are not ready for real trading.
2. Think For Yourself
Different traders have different techniques. This means there is limited value in getting advice from anybody else. Actually, unless you know that the person follows the same strategy and techniques, the advice is probably worthless to you.
Do not copy somebody else's strategy just because they seem to be earning money with it. Do your own research and check everything that you are told. Even then, consider carefully before dumping the system that you have chosen before. There can be factors that you have not taken into account. Something that works for somebody else will not inevitably work for you.
3. Keep Records
Keep a spreadsheet detailing each trade so that you can see patterns in your own results. You do not unavoidably need to use it to modify anything, but refer to it often to remind yourself of the lot of small trades that add up to success or failure.
What should you record? At a minimum, the currency cross, your position and the opening and closing prices. However, these bare facts will be much more useful if you can also add why you took the position. Did it match the criteria of your system? What made you think that the trend would go your way? With the benefit of hindsight you will have a much better perspective of why your trading history is going well or not so well.
4. If In Doubt, Stay Out
Do not open a trade if you are hesitant or unsure about it, assuming of course that you have a reason other than fear for your reluctance. A trade can only go one way or the other, so if it is not completely right, it is wrong. Sit tight. There will be many better opportunities.
5. Limit Your Trades
Do not be drawn into thinking that you must never miss an opportunity. You do not have to be on top of a lot of different currency pairs and jump into every market regardless of what else you could be doing.
6. Don't depend entirely on your own judgement
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