1. Forex Trading is your business. Attitude is a huge factor in your trading results. If you look at Forex trading the way you look at gambling in a casino for fun, or as a get rich quick plan it will severely affect your trading success. In a business you look at your overall profits and losses, not each individual expense or sale. If you approach your Forex trading the same way rather than getting over confident after a profitable trade, you will be trading from a different perspective and it will improve your overall trading results. If every time your business has a low grossing quarter, you changed your business strategy and your business plan, it would not be a smart way to do business. The same with Forex. If each time you have a loss you changed your strategy or took bigger risks, it would affect your trading results negatively although it is important to see each trade as a piece of the entire puzzle and realize it has potential to make or break your business year.
2. Stick to Your Trading Plan. Once you have researched, tested and perfected your trading plan, the most important part of the plan’s implementation. Confidence in your plan and not wavering from it are imperative to successful Forex trading. Letting emotion get in the way of using your trading strategy will only affect your trading results badly. Follow your plan as if it is law. Do not change your trading decisions based on what you hear from “experts”. Do not deviate based on your gut feeling. Do not deviate AT ALL.
3. Manage Risk Carefully. There are a few different ways to manage your risk in Forex trading. One of the key ways is to use your position sizing to your advantage. It is important to choose your position size based on your whole account and what a loss will do to your entire portfolio. Adjusting your position size to make sure that it works with your stop loss is an essential part of managing your Forex trading risk. Determine the stop loss that you will be working with and then adjust your position size to maintain the risk reward ratio that you are committed to as part of your trading strategy.
4. Always be forward thinking. If you want to improve your trading results and you have been religiously sticking to your strategy it might mean that your trading plan needs tweaking. Once you have determined that your trading strategy is in need of a change, it should of course be researched, and tested repeatedly before implementing the change. Learn new price action-based strategies. Test new settings for your trading plan. See where these possible decisions would take you over a long period of time, and only then should you consider making adjustments. Just because you need to stick to your plan does not mean you cannot learn and aim to improve in the future.
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