We will revisit some fundamentals, although we have talked about some tips before mapping out your trading strategy for 2014. However, we will keep hammering on certain issues as we believe you should trade with your eyes and ears open and your heart in its right place.
So we here it is again, some friendly advice from us to you, to help you be best trader you can be. If you are new to this whole notion, then the most important thing to have in mind is that forex trading is not at all the guaranteed path to making money fast, as you would perhaps have expected. If you are not prepared for a long process of highs and lows and your profitability increasing slowly as your trading skills improve, then you better keep away, because it is highly unlikely that you are one of those exceptional cases of naturally born financial wizards, who are able to achieve and maintain high profitability quickly and without effort.
Also, if you are a debutant make sure you don’t get over-excited and end up being carried away into losing money that you actually can’t afford to lose. Also remember that the fear of losing your funds will be impediment on focusing on your trading skills. Therefore, it is best to first try out on demo accounts until we get the hang of things are done and then gradually start by trading small amounts, increasing the money you invest and the associated risk only when you feel confident enough to do so.
Chances are that at the beginning you will be making many mistakes as it is common for any inexperienced trader. You will only improve however if you learn from these mistakes and in order to do so it will be very effective to be keeping a trading journal where you record all your moves, so as to easily remember and identify what went wrong and what went right each time, to be able to avoid repeating the same mistakes and to be able to replicate the wise moves of the past.
Whatever you do, do not despair and don’t think that you are alone. Even the most professional traders around where once in your shoes, rookies and puzzled and you will be surprised how many of them around there are willing to share their knowledge and help you succeed as well. So don’t be ashamed, ask if you don’t know something or you need help and take advantage of the resources and the experts around you.
On the other hand, if you are a more seasoned trader, it doesn’t mean that you should not take some time to ponder upon your trading strategies and decisions when mapping out your next moves for the year ahead, as it is still young. Having said that, we don’t ascribe to the notion that new is always better, because it is often not. Therefore, before scrapping your old strategies take the time to carefully evaluate and assess them in order to determine whether a few minor adjustments would have meant more successful trades. Also be honest enough to recognize any shortcomings you might have as often the problem does not lie with a strategy itself being wrong, but rather it being poorly executed.
Definitely the first step towards achieving a goal is setting it. However, make sure you don’t set the bar too high as then you will be likely to bend to pass below it. Don’t be carried away with unrealistic expectations created falsely by momentary successes of the past, but rather remember to set goals on the basis of your average past performance and which also reflect your time and capital limitations.
Just as rookies are liable to the frightened off and be psychologically affected by a losing streak, more seasoned traders are also in danger of becoming overconfident and therefore reckless and sloppy in their trades, taking on unnecessary risks following a string of successes. Again, therefore, keep things in perspective and try to operate with consistency and moderation.
Perhaps the most important piece of advice we could give is that both newbies and pro forex traders should never lose sight of the bigger picture as forex trading is not a quick fix, it is a marathon rather than the 100 metres race, and as such in order to be good at it you need to learn to appreciate the long process as equally as the result. Do not be over-focused on the profits only but also on the procedure that takes you there and enjoy the ride!
George Milios is the founder of onlineforextrading.net, the binary options and forex news portal which is dedicated to providing you with all the information you need to successfully trade.