What’s Love and Commitment Got To Do With Forex Trading?

Posted on by Forest in General, Guest Posts, Opinion, Saving Money & Finances

This is a Guest post by Vincenzo Desroches from Forextraders.com

Aspiring to be a professional trader can be one of the most rewarding journeys a person can go on; however, the path to consistent profitability will be fraught with perils and great enemies—namely oneself!  Although there are many keys to success in FX trading, one that stands at the top is the need to fall in love.

Fall In Love With A Strategy!

One of the strongest temptations one may face as a new trader is to continually jump from strategy to strategy. This can be a major hindrance to truly moving forward in the trading journey.  Now, let me clarify this just a bit.  At first, a new trader would do well by experimenting with several different strategies across several different time frames.  The reason is simple.  One’s trading strategy must be in line with one’s psychological make-up.  Attempting to trade a particular strategy or style that does not agree with one’s financial psychological composition will most definitely lead to a slowly, or quickly, drained account balance over time.

Thus, it is a good idea to familiarize oneself with several strategies at first in order to find what clicks. But!  As soon as a new trader discovers a strategy that he likes, he needs to build a relationship with this strategy.   It’s similar to a marriage.  At first it will be great because the experience is new and fresh!  But soon enough the honeymoon experience will wear off and then is when one must continue to forge ahead.  Don’t seek to breakup with the strategy as soon as the newness of experience wears off.

A new trader should treat his trading strategy as his ultimate weapon. This strategy is what will lead the trader to making consistent cash money in financial markets, so he should seek to refine and perfect it as much as possible. Every time a trade is taken, it is a good idea to print out a screen shot of the technical set-up, mark up the chart with notes as to why the trade was taken. Was everything in line, or were there a few missing elements that made the trade set-up less than optimal?  Do this for every trade that is taken, both winners and losers.

In fact, taking screen shots like this and examining losing trades is one of the biggest keys to finding consistent profitability.  When one takes a trade and it wins, what does one learn?  Not much.  The trade did exactly as the trader thought it would.  What is there to learn in that situation?  The real learning comes from examining losing trades.  It is here that traders will discover why some trades are not working out.  When a trader closely examines a losing trade, he may begin to unearth clues from the market that when X, Y, or Z are present in the market, the trade set-ups tend to not work out.  Investigating and analyzing losing trades in this manner can help a new trader learn the nuances of his trading strategy and help him to begin weeding out potential losers before the trade is even taken.

This is a powerful sign of trading maturity—learning how to identify less than optimal set-ups and pass them up.  This is comes through incredible amounts of screen time as you trade forex and truly developing one’s strategy and optimizing it over time.  However, it should be apparent that truly optimizing a strategy like this can never really be done by a trader that is simply jumping from strategy to strategy.  If a trader does not stick with a particular strategy through good times and bad, then true trading maturity will be hard to find.  The key is to stay faithful and consistent to one particular strategy. Own it and make it your own!

Tags: best forex strategy, forex tips, simple forex strategy, strategy forex trading