7 DO’S AND DON’TS ANY FOREX TRADER SHOULD KNOW Part 2

In the first part of the article I have covered the “7 Don’ts any forex trader should know” and today i will go over the 7 DO’S that i believe are of great importance for any trader. Here is a short summary of the topics in the first part of the article:

1. DON’T EVER REVENGE THE MARKET AFTER A LOSING TRADE. EVER.

2.  DON’T TAKE IMPULSIVE TRADES.

3. DON’T BE GREEDY.

4. DON’T HAVE UNREALISTIC EXPECTATIONS.

5. DON’T USE HUGE LEVERAGE.

6.  DON’T TRADE THE RUMORS.

7. STOP SYSTEM HOPPING.

If you would like to read the entire article click here.

Now let’s move on with the 7 Do’s. The first and most important in my opinion is to always keep track of your progress and check whether you are improving or not.

1. Never stop improving

 

Next to keeping track of your progress is learning, developing and improving. Forex is like any other profession. There are innovations constantly. If you are a car mechanic you must stay up to date with all new technology built into the new models every year. World is developing rapidly and if you want to be one of the top in the industry you must put some effort.

Try to dedicate at least 30 minutes – 1 hour a day solely to updating yourself. That might be your favorite blog, magazine, the news channel or a book. Manage your time accordingly. A friend of mine once told me “you have no idea how selfish your are until you have kids”. So yes i know how busy our daily routine could be but it is doable.

If you go to work by train or any other kind of transportation that doesn’t put you in the driver’s seat, use the time! An hour a day back and forth to work is plenty of time. An hour a day x 22 working days on average is 22 hours a month. That’s 22 hours that you can use and dedicate to you and you alone.

2. Be part of a trading community

Forex is not what and how it used to be. Forex is everywhere now. I’m sure it has reached your country to a level where there are local groups/clubs of traders. Join them! It is a lot easier, believe me. You can talk on the same subjects and questions with these people. You can ask questions that you have no idea how to handle. Like choosing a broker for example. Asking someone in the face is much much better than searching in a forum. You never know who is standing behind Fx_Trader544. You don’t know whether this is paid review by the broker or not…

If you can’t find such club or community in your city or you simply prefer to hand out with other trader in the comfort of your own home, look for one online (be sure to start with my forex club :)) ). If english is not a problem for you there will be many doors to open.

3. Always be positive

Try to always be positive, not only when it comes to trading but in general. Positivism is like the opposite of cigarettes. It gives you only good things. It bring good energy around you and other positive people. Being positive is natural shield against haters, energy vampires and all other kinds of grumpy people who do nothing else but complain each time they breath in and breath out.

99% of what happens to us on daily basis is fixable and not fatal. Maybe even 99,9%. Your dog ate your shoes? The kid re-painted the wall? Don’t bother for such small things in life. Smile and move on. If you approach life this way, your trading will be better. I guarantee you.

A losing trade shouldn’t make you lose your confidence and faith in the system your are using or in trading in general.

4. Confidence

Having a mentor and being a member in a trading club is great! Reading books and watching films on the subject is also fine. Having a role model is even better. BUT you must understand that the role of all the things listed above is to motivate you and get you started. Maybe even a bit further. You should try to be either better of them or be the best in your own way.

Every person is unique and best in something that 10 other people are not. We all the X factor in us, you just need to find it. So when someone is a super duper scalper on the m1 or m5 don’t beat yourself too hard if you can’t achieve same results. You may not be cut for this kind of trading. You may be wired for mid-short term trading. Some people operate better under high pressure while others will do incredible analysis when they have a few minutes to analyze the chart in peace, take a rational decision and kill it. Be the best based on your abilities. Use your strengths and work to minimize your weaknesses.

5. Trading Plan

This one is a must. You can’t and you won’t succeed without one. A perfect example is a student of mine for over 5-6 years know. He has great understanding of the market, the technical analysis, all my methods that I have been teaching him during the years – he does. But he is still stuck in the hole of inconsistency. The same psychological hole that lures in too many traders to fail.

If you think about it, it is very logical. What does the trading plan give you? It gives you an organized structured, black on white, a plan that you should follow in critical moments when the price is going against you and all kinds of stupid ideas start going through your mind. That’s it.

If you were a surgent you have a Surgical Plan. You start operating and X happens. When X happens you either have 1 option or a few options to choose from. If the blood pressure is too low, you can’t just wake the patient up and send him home right? Same is in forex, when a trade goes against you, stick to your initial plan and stop loss. When a trade goes into your direction, STICK to your plan and take profits. Traders work, sleep and live on statistics. We are statisticians.

Changing the rules of your strategy means that you are changing the statistics. When you do that you may either win more or lose more. Most likely you will lose more. IF for some reason you believe you have an idea that can improve the strategy don’t just try on your live account here and there. Do it the professional way – open a new file. Go back through the chart, write down at least 100 trade setups and do the math. Of course you must have the numbers of the original strategy to compare your tweak to.

6. Trading Journal

One of the first things you will learn when starting to trade is to keep Trading Journal. The journal will help you measure your progress and whether you are improving or not. If you are actually losing more and more, you are definitely doing something wrong and you will need to find where the issue is and fix it. Having a trading journal will help you do that very easily.

The journal is extremely helpful when you start being profitable too. If you for example want to tweak your system by applying a new money or risk management. It will also help you when analyzing your trades if you have to for some reason.

if you have tried to do it before, you probably know it could be extremely annoying BUT this is your business, not game room. As much as you may enjoy and love trading, it is not always all about the fun. We are here to make money not play games.

7. Do it until you make it

Do what you have to do until you start making money. This is the one and only mindset that you should ever have about anything you start doing. This is the mindset of the winner. I don’t want to sound too pushy and tell you how to live your life but history has repeated itself many times and quitters are not the one who made it.

If you open a restaurant or fast food chain and it doesn’t go well after you have improved your menu so surveys show that people like it, after you have adjusted prices accordingly, after you have done a good marketing campaign THEN you may say ok I believe I have done all i could think of. My shop is still losing money I should close it down.

That may be the case and logic behind 90% of the business. Forex on the other hand is NOT like that. In forex you are the marketing, the cost, the customer, the supply, the demand, the boss. You are ALL. If you quit, you are quitting on you. You can’t put the blame on the bad location, the bad economy, the bad whether or the poor customers. It all depends on you and no one else – 100% ( ok maybe 99% as your broker is most likely not on your side 🙂 ).

Think of these 7 DO’S. Also think about the seven don’ts that i have covered in the first part of the article. You will work for your money BETTER of any other person on this planet – anyone! There is no one else who is going to care more about whether you will have a profit at the end of the period or not.

Have a great rest of the weekend, if you like this article please share it! If you would like to add another subject to the DOs or DON’Ts  list or have a comment on the ones already covered, use the comment section below.

 

Yours,

Vladimir

 

 

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