Today will give you a few tips which will help you to become a successful trader. You should expect fast results but if you are consistent and persistent you will achieve success.
What Will You Need?
The secret of trader confidence is consistency and long practice. The more time you spend trading, the less doubt you will have about your decisions.
However, you should understand that no matter how long you’ve been trading, you can’t gain confidence if you keep losing. That’s why we will talk about a few key aspects which will help you to achieve your goals:
- Practice on a demo account
- Strong trading basics
- Competent planning
- Gradual training, one technique at a time
- Trading on daily charts
- Learning from your mistakes
Practice on a Demo Account
Before risking real money, you need to understand how the currency market works. Start by trading on a demo account. You should try out every possible situation on the market, learn to determine profitable trades, begin to understand when it is worth opening and closing positions. Only when you start feeling self-confident on a demo server you should proceed to live account.
Strong Trading Basics
Learn to feel the market. If you want to make confident trading decisions, then you need to understand the price movement. Start with the basics: learn to identify the main trend, find support and resistance levels. Study and remember how price behaves in a given situation. The more often you trade, the sooner you will learn to determine the future direction of the market on an intuitive level. And at this moment you will start to feel real confidence.
Competent Planning
There are three things which you will never become a successful trader without:
- Trading strategy
- Trading plan
- Risk management
If you are a novice trader and you still do not have a clear plan of action, then you should start with these “three pillars” of trading.
Gradual Training, One Technique at a Time
If you grab onto everything at once, then you will learn nothing. Train one technique at a time. You should move further only when you know all the nuances of particular price action and practiced it many times.
Having mastered a specific technique, you will easily notice the right situations on the market and determine profitable trades simply by having a quick glance on the charts. You will start trading at the subconscious level, which will make you more confident.
Trading on Daily Charts
For beginners, Forex trading might seem overwhelming. In this hectic, you can quickly get lost and lose your entire investment. If you want to delve into the trade, then start with daily charts. Here you can more clearly assess the market situation and make an informed trading decision.
Due to the high volatility in many markets, the price often fluctuates up and down, creating “false signals” or the so-called “ trading noise”. Inexperienced traders take such signals at face value and lose their investment.
On the daily chart, you will learn to recognize price action signals more accurately and do it at a more measured pace.
Learning From Your Mistakes
Each trader has his own methods, trading styles, and charts. But no one knows in advance what works best for him. To do this, you have to learn by trial and error. That’s when you should start using a trading diary.
Carefully record your every action and at the end of the day/week/month return to your trading history and analyze it. If you have lost money, try to understand what went wrong in order to avoid such mistakes in the future.
And vice versa, if the transaction turned out to be incredibly profitable, try to remember its signs in order to find and use them in your future trading.
I hope that these tips will help you on your path to becoming a confident trader. Using them, try not to confuse simple confidence with excessive confidence. Overconfidence leads to reckless decisions. If you want to linger in the foreign exchange market, go to your goal baby steps, and then you will succeed.