The importance of Strategy
As with any profession, you need to put in time and effort to be successful at it. Your strategy is the pillar that your trading will be based on. If your strategy isn’t a good one, you will fail in the long-run. A strategy is generally something which is built over a vast amount of time after many trials and errors. Of course, there are a vast amount of strategies that exist, but how do you choose the correct one? We’ll tackle this topic in another article, but this is why it’s so difficult for newcomers to get started and not lose all of their money really quickly.
Evestin Forex robots will allow you to inherit already built strategies and help you develop into a profitable trader no matter what your experience level is. If you have your own strategy – you can combine it with some automation. If you are new, you can see how, over time, a good strategy and discipline equal positive results, until you can develop your own.
The importance of mind-set and self-awareness
Mindset is very important because things can get really ugly if you’re in a negative trend. You start to doubt yourself, the market, the broker and everything around you. New traders often enter this cycle and will start to revenge trade (this is when you double your lot size after an already lost trade in order to win back your money and even profit). Revenge trading is usually done shortly after the trader closes his trade.
Tip of the day: After a bad trade – step back, relax, take a walk and come back to the markets in the next day. There will always be opportunities on the market – it’s important you have the money for them. Use losers to learn a lesson and strengthen your trade execution! Always make your trade with a clear and calm head!
The importance of numbers
At the end of the day, trading is a numbers game. Before entering each trade you should know a few things.
- what is the long term trend
- based on the long term trend – how many pips am I going after (take profit)
- where will I place my stop loss
- what is my margin level and risk tolerance
- If you know your numbers you will build confidence because you will know beforehand what to expect. If you have a good strategy and know your numbers, you will eventually be in profit.
The importance of patience
Last but not least is patience. This skill encompasses all others above. Patience is the skill that allows you to enter the trade at the correct moment. After a certain amount of experience, there are things you see in the market, just by looking at it. You have a better sense of the direction it’s going to go. While you have to follow your strategy very clearly, sometimes it would be needed to withhold from entering a trade, or maybe exiting one a bit earlier. These should be rare cases, of course. Patience is also what generally leads you to be profitable as it will allow you to let your running trades run until the end. Many traders suffer from closing their winning trades too early. This is something that will make the numbers not add up in the end.