10 Step Game Plan For Currency Trading Success
There is an old expression in business that says, if you fail to plan, you plan to fail.
It may sound cliche, however people that are serious about being successful, including traders, should follow those words as if they are written in stone. Ask any trader who makes money on a consistent basis and they will probably tell you that you have two choices:
1) Methodically Follow A Written Plan or 2) Fail.
If you already have a written trading or investment plan, congratulations, you are in the minority. Everyone can become a successful trader however not everyone is prepared to put in the time. So the first piece of advice I can give you on how to become successful as a trader is this:
Trading Is A Business, So You Have To Treat It As Such If You Want To Succeed.
Obsession. Passion.
You will need to have a healthy obsession with trading. You have to absolutely love trading. You have to love analysing the charts. Again and again and again.
However there is a very thin line to this, if you're too in love with your trading vehicle or investment, you give way to flawed decision-making. It’s your job to capitalize on inefficiency, remember your most important role is making money.
The Foundation
This is where the real work starts. You need to get the basics right.
Build your foundation.
Focus on the process instead of the profits. You should take a broad overview approach of what trading forex actually, invest in a mentor, ensure that you are learning everything related to trading.
Also start looking into creating a trading account with a regulated broker. This allows you to get a feel of how trading actually works while getting familiar with the different trading platforms. We always recommend ICMARKETS as the preferred broker, We have been using them as our preferred broker for a long time now and their spreads, swaps, support and reliability are top-notch and they are highly regulated so you know your money is protected.
The foundation stage is meant to get you up to speed with everything related to trading. It’s like a bird’s eye view on things like brokerages, the forex market itself, technical analysis, fundamental analysis, trading psychology and more.
Trading Plan
If you haven’t already, you should start creating your own trading plan. A trading plan defines everything that might be going on in your trading. It will be a place where you set goals, what your motivation is, what kind of trader you are, what type of trading style you’re comfortable with, what the exact rules are for your trading system and so on.
A trading plan will give you the guidance you need to be a trader. It will prevent you to take a free-styling, random and impulsive approach to the market. Just the process of writing down how you think about your trading will give you new insights.
The difference between a successful trader and a losing trader is that losing traders lack structure. A trading plan provides that structure.
Journaling
We all need some accountability. We need to know what works and what doesn’t. We need to track our performance in a way that we can review and adjust if needed.
We need a trading journal.
Journaling your trades is the process of writing down the stats of every trade you take in a journal. Entry price, exit price, date, time, stop loss and take profit target, setup type, time frame and so on. You will want to include a chart screenshot as well to be able to review it later on.
Journalling trades has many benefits:
it allows you to take a more stats and data-driven approach instead of gut feeling ways of trading the market.
it’s a logbook of your past trades, providing valuable statistics such as average win rate, the average risk to reward, Sharpe ratio and much more.
it allows you to implement review routines (more on that later) and see what you did right and where you made mistakes. This feedback loop is immensely valuable.
it holds you accountable.
Keeping a trading journal can be as simple as writing down your trades in a notebook, but it can just as well be something you save in Tradingview, Excel or specialised trading journal software.
Structure
Then you need structure in your trading. Build the habits of top traders.
Want to know their secret?
Trading routines.
Routines are what will bring consistency to your trading life. And I don’t mean routine in the boring, creativity-depriving sense. Routines should be created to improve your life and enhance creative thinking.
And it can be as simple as this:
Weekend (Sunday) - Analyse The Market And Create Your Watchlist For The Following Week
Mornings - Trading Prep For The Day
During The Day - Trade Management/Monitoring
Weekend (Saturday) - Review Previous Week And Do Some Fundamental Research
Monthly - Review Trading Month
Structure helps keep you in line with your trading routine… consistently.
Consistency
You need consistency.
Keep working at executing your trading plan flawlessly.
Often review your performance and if you see deviations, investigate why this is happening so you can potentially adjust. Keep on learning.
Consistency is incredibly important so keep an eye on making sure you survive as a trader.
The important lesson is that, once a trader has confidence in their trading plan, they must have the discipline to stay the course, even when there are the inevitable losing streaks.
In Conclusion
Most traders fail to tap their full potential, eventually cashing in their chips, but it really is because most forex traders don’t stick around long enough to know if they could’ve made it or not.
Become a proud member of the professional minority by following classic rules designed to keep a razor-sharp focus on profitability.
Will this set you up with the best chance of actually making it as a forex trader? Yes! And that’s basically all you can hope for. Work hard, don’t give up, have patience and you might make it. The freedom (both financially and in time) are so worth it.
This is part one of the #10 Step Game Plan For Currency Success” looking out for the second installment soon.
Happy Trading
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Risk disclaimer: The information presented on our blog are for educational and entertainment purposes only. Nothing on this website serves as investment advice or recommendations. Trading is risky and you can lose more than your initial investment. MyFxMentor cannot be held responsible for any decisions visitors make. Please consult a financial advisor before making any investment decisions. Risk disclaimer.
