Whether you’re learning how to trade forex for the first time and are feeling nervous about where to start, or you’ve been in the game for a while but have recently been hit with a number of losses and subsequent self-doubt, there are plenty of techniques you can employ to harbour inner-confidence when trading.
As a career built on conditions of uncertainty, this type of trading can result in forex traders feeling elated after a successful win one day, then incredibly low after a big loss the following day. As a result, due to the market’s inevitable turbulence, it’s vital you look to build a strong psyche to help you form a stable career in the world of foreign exchange. To help you do this, therefore, we’re disclosing 3 forex trading tips sure to help you combat trading anxiety and build your confidence in the market.
It should come as little surprise to you that success and confidence are interlaced. After all, how many confident people do you know who have a constantly negative attitude and approach to situations, or have a tendency to feel sorry for themselves when problems arise instead of resolving the issue they’re faced with? We’d guess not that many.
As such, while it’s natural to lose trades, it’s how you deal with these situations that will be the making of you as a forex trader. In order to rid yourself of anxiety and build your confidence, therefore, it’s crucial you stay positive – halting negative thoughts about how much you’ve lost when they first arise and thinking, instead, about the actions you took to get there.
For example, ask yourself: what went well this time around and, contrastingly, what could you have done better should you come up against a similar situation in the future? Identifying both the positives and negatives will help you feel more confident in future trading scenarios, due to you feeling more prepared in the knowledge that you’ve tackled situations similar to this in the past – and if you could get through it then, you can get through it now.
Focus on process
We’ll be the first to admit it, foreign exchange markets are unpredictable. While, of course, there are a number of strategies you can consult to help you predict market movements, there’s no obvious way of knowing whether you can expect to see a win or a loss. As a result, in tricky situations, you need to remain aware of the trading process itself as opposed to focusing on your investment returns, as this may leave you feeling concerned and anxious as a result.
So, in day-to-day trading, it’s crucial you don’t concern yourself solely with the potential outcome of your trades. Instead, you need to remember to concentrate on ticking off all aspects of your forex strategy – after all, every time you’ve followed one of your own rules, that’s been a success in itself! While this technique won’t necessarily help you see immediate results, this is an effective exercise when looking to build self-discipline and will help make you feel more confident in the long-term.
Practice, practice, practice!
Undoubtedly, if you want to learn forex trading properly, you’ll need to practise again and again. After all, boxing legend Muhammad Ali didn’t earn his title and manage to win 56 of his 61 fights without years of training, discipline, a few knockdowns and lots of confidence in his own ability.
As a forex trader, you won’t be able to predict how the markets will change and what punches lay waiting for you around the next corner. So, in order to be in with a chance of success and build the confidence to tackle these scenarios as they’re dealt to you, you need to prepare yourself for every possible outcome – creating a full-proof forex strategy ready to tackle any eventuality. Only then will you feel confident in carrying out riskier trades based on what you’ve come to know from previous situations.
To trade forex confidently, you’ll need to remember that success and confidence go hand-in-hand. First of all, make sure you believe in yourself, following your trading and risk management strategies all the while – you’ll soon find you’re on your way to seeing your number of wins outweigh your losses.
For further assistance with forex trading for beginners and veterans alike, find out more about the team here at Learn to Trade and how we can help you on your journey here.