9 Practical Forex Trading Strategies (Part 2) | 90% of Traders Stop at No.9

ATFX

Publish date: Mon, 17 May 2021, 05:50 PM

5. Try to determine the ideal profit target for each trade

You have probably wondered before about how to determine the ideal profit target for each trade. The first step to doing this is to avoid imposing external expectations on the market.

Yes, leave that to the amateur traders, and check your trading account's transaction history.

You could enter this information into a trading simulator and investigate what would happen to each trade if you didn't close it at the wrong time. Record the alternative results so that you can determine the ideal profit target for each trade identified by your trading system.

Despite the importance of all the previous advice, you must remember that it is very likely that you will not reach your trading goals. Setting the ideal profit target requires immense skill and insight, which unfortunately cannot be arbitrarily estimated. But following these tips and constantly evaluating your trading results will set you on the path to success.

6. Develop your style of trading

There are no right or wrong methods of trading currencies; the important thing is to choose the method that reflects your personality, optimises your resources, and taps into your strengths.

The above elements will determine the conditions that push you to open trades, set your stop-loss orders, and when to close trades for either a profit or a loss. Your trading style should reflect your daily goals to increase the profit potential of your trades.

Executing a trading plan that allows you to make profitable strategic trades depends on finding the right trading style for you.

7. Track your progress and extract valuable lessons.

Your time is the most critical asset you own, so you must make the most of it when trading. This requires that all your trading decisions are not affected by your emotions. Always stick to your chosen trading strategy to increase the chances of achieving your trading goals.

Whether you are a day trader who closes all their positions at the end of the day or a swing trader who holds their positions overnight, focus on making progress daily. Always analyse your trading performance at the end of the day and draw lessons on what you did right or wrong, which will make you a better trader over the long term.

Keeping a record of your trades will allow you to identify your strengths and weaknesses to keep improving your skills to become a better trader. You can use these processes to identify your unique path to becoming a successful trader.

8. Try to understand the psychological factors of trading

Your psychological state is one of the main factors determining whether or not you will succeed as a trader. Trading is a mentally taxing endeavour, and the best traders know how to control their emotions so that they do not affect their trading decisions negatively.

If you set yourself a daily profit target and achieve it in the first half of the trading day, how will that affect the rest of your day? Will you continue trading while minimising the amount of money you speculate with? Or will you shut down your computer, content with having attained your goal for the day?

Understanding and mastering your psychology will help you act logically when trading forex to make the right trading decisions aligned with your trading strategy. The journey to becoming a successful trader requires you to master your human psychological tendencies, most of which go against the fundamentals of trading.

9. Learn how to deal with risks

Your ability to handle the risk inherent in each trade is a determining factor to your success as a trader. You have to fight fear, which is a powerful emotion, to make the right trading decisions constantly.

Mastering fear will help you handle the risk of opening trades identified by your trading system and keeping winning trades running for the maximum profit while cutting short your losing trades.

Fear can keep you from taking all the trades identified by your system, closing down losing trades, and letting your winners run, which is the opposite of what you have to do to become a successful trader.

Therefore, you must acknowledge the dominance of risk in trading, start with a demo account if you have to. This will allow you to prepare for all possible losses and potential trading profits psychologically. If you want to make consistent profits, you must keep assessing your risk tolerance.

You should always keep potential risks in mind when preparing your trading plan to not leave room for surprises that are difficult to deal with.

There is one thing that all successful people have in common, regardless of the fields in which they work, and that they all follow a specific routine and adhere to it.

Focusing on your trading routine will get you positive overall trading results instead of focusing on a daily profit target, which you might not attain, leading to a lack of motivation.

Set up a Metatrader 4 account or Demo Account start trading now!

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