With the new year now well and truly underway, it’s possible your swanky new exercise mat still hasn’t been rolled out, it’s been six drinks since you gave up on dry January and your bike’s flat tyre still hasn’t been pumped up yet, let alone hit the road – but after all, there’re always next year, right?
While your more personal New Year’s resolutions may be beyond salvageable, here at Learn to Trade, we’d like to think that the same can’t be said for your forex trading goals, as developing your skills and forex strategies is a vital characteristic of any successful trader. And after all, what better time to reassess this than at the start of a new year?
With this in mind, in today’s blog post, we’re exploring 3 resolutions you can apply to your FX trading strategy, helping you to feel confident in your ability of how to trade forex this new year and beyond.
Allow your winnings to accumulate
Arguably one of the biggest mistakes novice traders make is cashing out too early. Naturally, it can be exciting to actually touch tangible profit and hard to resist the temptation to take out your rightful winnings and run (particularly after the busy festive period that, come the first week of January, made you wince at your bank balance). However, what you need to remember is that if your position has been successful so far, there’s perhaps even more money to be made as a result – with the more experienced and successful traders having the ability to determine when this is the case.
So while a trader who has closed their position within 10 pips might pat themselves on the back and buy their friends the next round, if the trend were to continue for another 20, 100 or even 200 pips, then the fact of the matter is that there was ultimately a lot more profit to be made. Consequently, we’d encourage you to be a little more daring on the market this new year (where this is financially possible), practising the art of patience by letting your winnings total up for a chance of higher profit when the charts point to this potential.
Know the market inside-out
To succeed on the foreign exchange market, you require a certain degree of skill, patience and the ability to think strategically – however, without a thorough understanding of how the forex market operates, you’re likely never to reach your full profitability potential. So, why not decide to focus on this in the new year, making your goal to ensure you know the ins and outs of the world’s most liquid market?
Whether this means signing up to a professional forex trading course, or making sure you regularly remain up to date with the latest forex news (or both!), discover which way of learning works best for you and dedicate some time each day, week or month to concentrate on this. No matter if you simply need to brush up on your theory or decide you need a crash-course in strategy, the only way you’ll become a better trader is if you try hard enough and discipline yourself.
Don’t be greedy
The forex trader’s biggest enemy is greed – and, while we’re aware we previously encouraged you to become more daring this new year, it’s as important (if not more so) that you effectively learn to distinguish the line between risk and greed (point #2 should help you with this).
Now, it’s not uncommon for even the very best forex traders to incur regular losses. The trick is to accept these losses with dignity instead of trying to recoup them by making emotive, illogical, and high-volume trades, however.
Similarly, while you’ll feel elated as a result of being on a winning streak, it’s vital that you don’t let yourself get carried away by opening higher volume positions inspired by in-the-moment-confidence. Either of these practices should be readily avoided at all costs and have the potential to cause significant consequences on your finances.
To ensure you’re following best practice and therefore catapult your trading journey to the next level, follow the above 3 tips into your forex strategy this new year. For more information on how our experts here at Learn to Trade can help you on your way, get in touch with our helpful team today.