How to Get Better at Forex Trading

It’s always the right time to improve your skills

Improving one's trading skills is an ongoing journey, and it's imperative to recognize that success in the financial markets is anything but a constant. Unfortunately, many traders fall into the trap of perceiving temporary successes as the norm, mistakenly viewing them as the holy grail of trading knowledge.

In reality, statistics show that up to 90% of traders experience losses in the market, underscoring the need for perpetual skill enhancement. To navigate the ever-evolving landscape of trading successfully, we've compiled the top 5 tips to help traders redirect their focus in the right direction. These rules not only enhance your trading skills but also serve as a survival guide during periods of losses and help maintain the right mindset during prosperous times.

1 Keep your focus on long-term performance

Maintaining a focus on long-term performance is paramount for traders. The biggest risk in trading is viewing it as a quick money-making scheme. The harsh reality is that attempting to generate rapid profits often leads to over utilizing leverage, neglecting risk management, and engaging in excessive trading activity. Therefore, setting realistic goals right from the start is essential.

For example, a goal should sound something like, "My primary objective is capital preservation and adherence to my trading strategy. By adhering to these principles, I can potentially achieve profitability”. It's important to stress that trading should be viewed as a marathon, not a sprint. By emphasizing long-term performance and consistently adhering to a well-defined strategy, traders are more likely to attain sustainable success while avoiding the pitfalls of impulsive and high-risk trading practices.

2 Master your trading in the simplify

Many traders mistakenly believe that there exists a hidden and extraordinarily complex Forex trading strategy. In reality, 90% of your success relies on meticulousness, discipline, and strict adherence to risk management. There's no need to overcomplicate your trading rules to the extent that you can't follow them consistently in any situation. Always know precisely where you enter a position, where your stop-loss is, and where you take profit.

Remember that you can trade the simplest patterns that provide just slightly over 50% accurate signals, but proper and straightforward risk management will consistently guide you towards profitability.

3 Continually learn and practice

While perfecting your trading skills, it's crucial to understand that your education should never cease. Trading successfully means adapting to the ever-changing market landscape. Sure, trading might appear straightforward during strong trends, but markets often become highly volatile and range-bound. Therefore, you should always be open to exploring new trading tools and strategies.

The key here is to use a demo account as your laboratory for continuous learning and experimentation. This allows you to develop robust risk management rules and tailor position sizes to suit your evolving strategies. By embracing the mindset of perpetual learning, you equip yourself with the flexibility needed to navigate various market conditions effectively. Remember, the markets are always evolving, and traders who stay committed to learning are better equipped to thrive in this dynamic environment.

4 Build the right psychological mindset

Developing the right trading psychology to manage emotions is paramount. It's essential to consistently maintain a realistic perspective on the market and avoid being swayed by emotional swings. Understanding that opportunities present themselves daily and having the discipline to skip trades when necessary, reducing excessive risk-taking, and focusing on a long-term outlook can significantly improve your trading results.

To enhance your psychological preparedness, consider delving into valuable authors on trading psychology. Traders Union (TU) recommends reading their books as valuable resources to enhance your trading skills and psychological preparedness.

Mark Douglas is renowned for his pioneering work on trading psychology, with books that delve into the psychological mindset needed for successful trading.
Books: "Trading in the Zone”, "The Disciplined Trader: Developing Winning Attitudes”.

Brett N. Steenbarger, a psychologist and trader development expert, offers a comprehensive series of books covering various aspects of trading psychology.
Books: "Trading Psychology”, "Trading Psychology 2.0”, "Enhancing Trader Performance”, "The Daily Trading Coach”.

Jack Schwager's "Market Wizards" series features interviews with accomplished traders, offering valuable insights into their trading strategies and mental approaches.
Books: "Market Wizards" series (various volumes).

5 Allocate time to pause

Taking breaks is beneficial not only during successful trading periods but especially during a rough streak. Before comprehending the root of the problem or the reasons behind your success, achieving long-term results can be elusive.

During successful trading, pausing allows you to reflect on what's working well and refine your strategies. It prevents overconfidence and helps maintain discipline.

In contrast, during challenging times, taking breaks is crucial to prevent emotional decisions, assess losses, and regain a clear perspective. Only by understanding the underlying issues can you work towards consistent long-term success in trading.

Extra tip - keep you trading journal

Keeping a trading journal it’s your trading superpower in the context of improving trading skills. It’s valuable practice because it serves as a detailed record of your trades, helping you analyze mistakes and cultivate the right attitude. By meticulously documenting your entries, exits, reasons for trade, and emotional states during each transaction, a trading journal allows you to identify recurring errors, patterns, and emotional triggers. This objective self-assessment fosters a disciplined mindset, enabling you to learn from your mistakes, refine your strategy, and ultimately become a more skillful and emotionally resilient trader.

Best Forex brokers 2024

1

9.4/10

Go to broker

eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. Don’t invest unless you’re prepared to lose all the money you invest.

Minimum deposit:

$50

Bonus for deposit:

0%

Regulation:

CySEC, FCA, ASIC

Review

The eToro broker was founded in 2007. The company promotes itself as a social trading platform working with traders from over 140 countries. The broker has several divisions operating under different jurisdictions and licensed by different regulators. For example, eToro (Europe) is licensed by the Cypriot regulator CySEC (109/10) and eToro (UK) is licensed by the British regulator FCA (583263). The broker also has a representative office in Australia and the USA. eToro Profile Details

Pros/Cons

•the minimum transaction amount for copying is $1;

•handy functionality for passive investing;

•regulated by independent monitors;

•it is possible to purchase contracts for fractional shares (that is, to invest amounts less than the cost of one share);

•it is possible to buy shares at once (not CFDs) on the US stock exchanges.

•high spreads;

•periodic technical failures in order execution;

•lack of the most popular platforms such as MetaTrader 4 and MetaTrader 5 in Europe and the CIS;

•no access to ECN systems, orders are processed only according to the STP (straight-through processing) scheme with access to specific liquidity providers;

•there is a commission for withdrawing funds;

•impolite support staff;

•inconvenient website.

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2

9.2/10

Go to broker

Your capital is at risk.

Minimum deposit:

No minimum

Bonus for deposit:

0%

Regulation:

FSC (BVI), ASIC, IIROC, FCA, CFTC, NFA

Review

The name OANDA is an acronym for “Olsen & Associates” or “Olsen AND Associates”. It is registered in the United States and provides its clients with a wide range of financial services in most countries of the world. The company was founded in 1996 and is currently regulated in four jurisdictions. The main regulator of the broker is the UK Financial Conduct Authority (FCA). Oanda Canada is licensed by IIROC. The company has several significant awards to its credit, including a victory in the category "Best Forex Trading Technologies" from the UK Forex Awards, "Best Trading Platform" from FX Week, as well as "Best Customer Service" from the US Foreign Exchange Report.

Pros/Cons

•Minimum deposit from 1 dollar.

•A large selection of the most popular trading instruments.

•Several reliable and reputable financial regulators.

•Inconvenient and poorly functioning site.

•Lack of cent accounts.

•Lack of bonus programs.

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