Many of our traders wonder what they can do to become more successful. Seeing other profitable traders who consistently generate returns can make one wonder what it is they know that others don’t. Here are some of the most important tips for improving your focus and potentially your performance.
Get up early!
Getting up early in the morning is not something that just traders do but something that nearly all successful people have in common.
Some of the most successful people in the world often say that getting up early helps them be more productive, makes them feel more at ease mentally, strengthens their resilience and drastically improves their health. The question really becomes why not to wake up early.
Once you’ve learned to get up early, implementing a daily exercise routine should be next. This is another of those habits that nearly all successful people say they follow. It really seems to work!
Even if you don’t want to put the time aside to go to a gym, doing a few jumping jacks, situps, pressups and so on at home in the morning goes a long way. If you live close to a park or a forest, go out for a run. We can almost guarantee you that you’ll feel better about trading afterwards!
Read the news
Even if you’re a purely technical trader and don’t base any of your trades on fundamentals, it’s essential to know what’s going on around you. This is particularly true in forex markets where economic events can cause sudden selloffs for many symbols.
Check the economic calendar each morning before you start trading. If something big is coming up and predictions vary wildly, consider avoiding the symbols affected on that day. Keep in mind that fundamental events have the potential to render even the best technical trading strategy useless. Unless you’re following a specific news-trading strategy, avoid trading during major releases.
Stick with your strategy
A very common mistake among new traders is to fall into the vicious cycle of ‘strategy hopping’, jumping from one strategy to another, constantly chasing the ‘holy grail’ that many new traders believe they will eventually find.
We’re sorry to disappoint you, but most experienced traders agree that it doesn’t work like that. Instead, what these traders do is stick with their strategy through both losing and winning streaks. They do this because they know that it’s essential to keep trading for the statistical edge of a good strategy to play out. This is the phenomenon known as the ‘law of large numbers’.
Without a large enough sample, the law of large numbers will never work the way it’s intended to, so make sure you give your strategy the chance it deserves to prove itself.
Separate charting from trading
Another thing that many successful traders do is learn to separate their analysis and charting from the actual trading. Charting is the reading and analysis of charts — usually candlestick charts — to test strategies and/or review historical data. It’s important to realise that charting and trading are in fact totally separate activities. They should not be mixed together.
Charting and trading together in the same session lead to impulsive trading. For example, you may open a position simply because you’re tempted by a sudden movement you see on the charts. These are not well researched trades that follow a strategy, so you should avoid them. Instead, manage your time so that you dedicate one session to analysis and charting, then one session to actual trading where you can trade based on your strategy.
Separating charting and trading can help you make more rational decisions without emotions influencing your judgement. Instincts and emotions can easily become our main enemies when trading. We need to do everything we can to keep these factors under control.