If you are just starting out as a trader, this piece is for you.
Here is a list of all the habits that are best formed early in the trading career. These are incredibly helpful but once you start trading without them it can seem like a massive task to build these seemingly simple habits.
It is best then to incorporate them in your trading life right off the bat.
1. Keep a journal
This might seem like something a therapist would say to a troubled individual but hear us out.
Keeping a journal means keeping a record or log of your daily activities. In trading the activities you need to keep a log of is your daily performance.
This means that you include the trades you made in a day (the assumption here is that you are a day trader, but swing traders and position traders should also do this).
The benefit of doing this is that you get to track how you did over the course of time. You can also go back and see if there was something that you were doing that was working for you or not working and how things have changed.
Essentially, it is a great way of keeping tabs on yourself. People tend to forget what they did two or three days ago. When you are trading randomly like that it can become difficult to know if you have gotten better or not.
So maintain a trading journal, record all your trades in it and if possible, also add a little analysis to it of your own performance at the end of the day.
2. Be strong minded
There is a lot of noise in the forex market, especially when it comes to strategies, which ones work and which don’t.
You will hear a bunch of opinions. However, you can’t let yourself get distracted by them. While there is every possibility that someone’s strategy might be a great one, letting your mind go down that road will only make you doubt yourself even more.
Second guessing and doubting are elements that tend to hold people back. They keep you from taking action and in trading one has to be decisive.
Changing your plan every step of the way will most likely result in taking one step forward and three steps back.
Hold your own. This will also encourage you to stay informed and updated with trading news since you will know that you are relying on yourself alone.
Relying on others can sometimes mean that you aren’t equipping yourself with the tools you need.
3. Don’t get emotional when you lose (or win)
Letting emotions get involved is the worst thing you can do to yourself as a trader. We have done another blog post on this too which you can see here.
Emotional thinking has no place in trading where you need to be as rational and logical as you can be.
Even positive emotions should be kept at bay when it comes to profits. Emotions such as hope and excitement can, for instance, keep you in a trade for longer than you should’ve stayed.
Wins and losses shouldn’t be taken personally especially since it makes no sense. The market doesn’t know who you are and it’s not out to get you.
4. Be disciplined
By discipline we mean following a time schedule, putting in the hours, not letting emotions get the best of you, making the decision that’s right for your account not for you ego, and most importantly strict risk management.
These are all things that make for a successful trader. People like to make forex trading seem like an intense and thrilling sport. It is quite the opposite actually.
Successful and risk free trading is not exciting. It is a lot of doing the same things and getting out before things get risky. Successful traders don’t take too many chances.
These may sound simple but you’ll be surprised to know how much they actually demand of you.
Successful trading requires that you approach trading like you would any other business or skill. There has to be a system and you have to stick to some guidelines that you know you need to stay disciplined.