Habits, good or bad, apply to all aspects of life. Let’s take a look at how habits affect my favorite area – forex trading. Over the years, I have found that the following seven habits can help traders keep their feet on the ground and, more importantly, keep them profitable.
Habit 1: know the reason for every trade
Many traders try to jump into the market because they “think” it’s profitable. Usually, when the price drops sharply, traders will take action, because they think that “the price has dropped to a very low level, and it will rebound”.
Every trade has a reason. This means that you have to follow a trading plan. Trading can never be “intuitive”.
Habit 2: there are always new Trades
In my trading career, the traders I met always seem to be on tenterhooks. They become anxious and depressed because they “missed the trend” and regret that they didn’tuse their laptops to complete all the important trades on this day.
The foreign exchange market is the largest financial market in the world with a daily turnover of about US $400 trillion. Trading opportunities are endless, so don’t blame yourself for losing one. Who said that the lost trade will be profitable? That’s a comfort.
Habit 3: be decisive
This habit is my rule when I teach students. I sometimes joke with students that if I heard that any student didn’t cut his position after trading, no matter where I was at that time, I would fly back to hit him on the head!
Believe me, the most important reason for traders to lose money in their accounts is their habit of taking excessive risks. Don’t fall into this trap, always cut the position. Make it a good habit from today on.
Habit 4: don’t retaliate after losing money
You just finished the trial transaction in the simulation account, and now you are ready for the real transaction. The first chance is here. It’s time to make a lot of money!
You made a trade, but you were forced to cut your position. Once again, you try to sell.
You are annoyed, the transaction should not be like this!
In the third transaction, you increase the investment cost to three times of the original, because you want to “win back” the money that the foreign exchange market mercilessly takes away from you.
This behavior sounds too familiar, right?
Don’t fall into the trap of revenge. The foreign exchange market will make you pay a heavy price. The key here is to understand that this is not for you alone. No one makes money on every trade. What you should do is leave the computer and re analyze your trading plan.
If everything goes according to plan, great! It’s normal to have losses. Accept that.
Habit 5: keep a trading diary
This is difficult, and not many traders do it. Those who keep a diary really believe in its immeasurable effectiveness.
The trading diary should record the decisions you made before the transaction, and record your thoughts and emotions after completing the goal. The following short list tells you what should be included in the transaction diary:
1) The date and time of the transaction
2) Currency pairs (e.g. euro / US dollar, US dollar / Japanese yen or British pound / Canadian dollar)
3) Actions / strategies taken (long term or short term)
4) Risk (how many hands, cut positions)
5) Potential profit (do you have one or more profit targets? )
6) Results (profit / loss)
7) State (what are your thoughts and emotions? Are you doing the right thing? )
A trade diary is like a road map. It can help you point the way. Here’s a question: if you don’t record your progress, how can you know if you are going in the right direction?
If you don’t have a framework as a measure, how do you know if some “bad habits” will inadvertently become your stumbling block? Start to keep a trading diary today!
Habit 6: keep your brain clear
Just had a fierce quarrel with friends or family. Is it wise to do analysis or trade at this time? Or you work 14 hours a day and your boss scolds you for not completing your task. Is it wise to make a decision at this time?
Of course not. When you are ready to trade on the computer, you must always keep a clear mind. You don’t want any emotions to make you hallucinate and see patternsthat don’t exist on the screen.
Habit 7: always pay for yourself
Is this habit important? of course.
What is the ultimate purpose of the transaction? It’s about generating continuous profit returns. But what’s the point if you don’t enjoy the benefits of exchanges?
There are many ways to pay for yourself in this industry. Let me list a few:
1) Set a goal of getting all the money back. When you achieve this goal, take out your start-up funds and use the money you have earned to trade later. This is actually a “risk-free” business.
2) Take out a certain amount of money remaining in the account and continue to add it when you have reached 20%. Make sure you withdraw far more than you may have to pay your broker.
Now you know the seven habits of foreign exchange trading experts. How to develop these habits? Very simple, as long as you have been doing these things for quite a long time, then these behaviors will naturally become your habits.
After that, you can develop into a mature trader and become an important force in the trading world.
Finally, I’d like to share with you a wonderful quote from Vince Lombardi, the greatest football coach in history
Success is not temporary;
Success is consistency.
Success is not an accident,
It’s not the occasional right thing to do,
It’s always doing the right thing.
Success is a habit,
Unfortunately, the same is true of failure.
—Provided by www.USDcashback.com
—An online forex trading rebates service since 2012