Trading techniques that can work for you

Education

A look at the simpler things you can do to help your trading

Trading
like anything else is about practice, reps, routine, and goals. Without any or
all of these things it is difficult to be successful in your trading.
Complicating this process slightly is the influence of other factors as well,
namely emotions, a desire to make profit, and expectations.

For
these reasons, it’s important not to get too caught up with any one specific
goal or expectation, as this is when mistakes and losses can happen. When
trading with an effective balance, emotions such as fear, ego, greed and
revenge trading are practically non-existent.

Only then can you manage to be the best trader
you can be and achieve a level of success you are likely looking to pursue.

The bitterness of reality

Unfortunately, axioms
and motivational speeches can only get you so far. Once your money is on the
line, even an individual who has had months’ worth of consistent returns could
easily choke or experience losses when they go live. So how can you practice to
become perfect?

Keep calm and trade

Not all
markets are created equally and some are certainly more volatile than others.
For example, classic markets such as oil, exotic currencies, and cryptos are
all classified as highly volatile.

While
the term carries a negative connotation, volatility can actually benefit
experienced traders and some strategies. For example, without any volatility,
there would be little chance of making any profits at all, the challenge is
finding an acceptable level of this force.

By
extension, there is a lot that can be gained by simply trading on less active
markets. Rather than being priced into big decisions, you can instead gain a
valuable chance to analyze and act without the pressure of constantly
fluctuating price movements.

Furthermore, another
benefit of trading across more subdued markets is that that less volatile
markets tend to move less, so if you are the wrong side of a trade, you stand
to lose less than if you were trading on a volatile market.

Learn from your mistakes

Everybody
makes mistakes, that’s why they put erasers on pencils. In the world of
trading, mistakes – or more specifically losses – reflect a valuable
opportunity for growth and learning. This is why such setbacks are important
for growing as a trader.

A good
practice is also to keep a trading journal, complete with a log of all the
reasons that lead you to opening a certain position. This can include the
fundamental or technical data that informed that trade.

Understanding your thought process
in any given time is the best way to make sure that correct and informed
decision-making was rewarded and a lack thereof was met with losses. Traders
that have routinely found success have managed to find the winning formula
through trial and error so it’s ok to make mistakes.

Experience through setbacks

Being
mentally tough comes from experiencing losses. A trader who has never known
adversity is unlikely to even know their own limits. Rather, most of the
negative emotions that traders experience is associated with losing.

Ultimately,
experience will teach most traders that losing is part of the game. To stay
viable and sustain your account, you must look at the big picture and not focus
on individual losing trades. You can still be successful even after incurring
losses so long as you learn from them and improve.

Do not let even the
smallest setback deter you from learning as each instance of success or failure
is a valuable opportunity for growth.

A break from the monotony

Many
traders like to approach their craft full throttle but it’s also important to
space in breaks periodically. It is completely reasonable to become burnt out
en route to grinding out gains, and thus it’s crucial to understand your own
limits and need for a respite.

Much
like other professions, the advent of recuperation and recovery is a time and
tested strategy to ultimately improve and condition yourself. Trading is no
different and if you are fatigued, winded, or tired, then your body is telling
you it’s time for a break.

Some professional traders
say that after three consecutive losses or wins they will stop for a moment and
take a walk. This can help take you separate yourself from any trade
emotionally and avoid any level of impulsiveness that can lead to even greater
losses.

– This article was
submitted by UBCFX

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