There are many factors that can count towards helping you become a successful forex trader. Whilst it is a priority to have a good forex trading strategy, there are many other essential things you need to consider in order to increase your chances of having success trading online.
Amongst these factors that can have an impact on your over trading performance is having an uncomplicated trading routine in place. In this guide we will look at 5 ways in which you can enhance your trading routine which in turn can increase your efficiency.
1. Avoid over trading
Over trading is the scorn for many retail traders, especially beginners. They seem to think that the more they trade, the more successful they will be. This is not necessarily the case due to something widely known within the trading community as “over trading”.
When you over trade, not only can you increase your risk exposure but you may also make rash decisions that you would not have made with a clear head.
It can be imperative to take regular breaks and not to deprive yourself of useful sleep times. I would try to ensure that I get at least 8 hours of sleep every day and step away from the charts when I feel tired to give myself a break.
Forex trading can be a very tiring and draining exercise, especially when sitting down and constantly staring at multiple charts all day. When taking a break, I like to try and engage in other activities to renew and reinvigorate my mind such as paying a visit to the gym or engaging in another hobby.
If you are still feeling drained despite not over trading and taking regular breaks, it may be time to switch up your trading style and draw up a new plan that is more suited to your individual needs.
2. Prepare for your trading day
Benjamin Franklin — ‘If you fail to plan, you are planning to fail!’
It can be a wise idea to prepare your trading day prior to it starting, ideally a day or more in advance. This can give you a clear plan and target for the day which can improve confidence and ensure that you know what you are doing.
Many traders will conduct some form of fundamental analysis in advance so that they are aware of and prepared for any significant economic news that will be released which can have an impact on the currency pairs they are interested in trading.
Also, as soon as the New York session closes on Friday, you can use the weekend to make analysis of the coming week by reading different reports and searching for possible trading potentials as soon as the next trading week opens with the bell in Sydney.
3. Adjust your trading strategy accordingly
Alongside having a forex trading plan, the trading strategy implemented is another major factor that can help determine how successful your trading will be. You should incorporate a trading style that suits your own individual needs.
Things to consider include the type of trades you will take (scalping, day trading, swing trading), your availability to trade, your preferred method of analysis and much more. If you have a trading strategy that you feel comfortable with, it can improve your overall performance.
One of the mistakes that I frequently see from forex traders is that they are constantly changing their trading strategies without actually giving consideration to what the advantages and disadvantages of these strategies are. I have seen traders give up on a strategy after 1 losing trade.
It can take time to master a strategy and also requires a good trading plan with strict money management and discipline. You can take the good and bad from each experience to help improve your strategy moving forward until you find what works best for you as everyone is different.
You should also be aware that some strategies are better suited for specific market environments. This means that trend-following strategies function better in trading trending markets, but would generate false signals in ranging markets. The same applies if you are trying to trade reversals in a strong trend.
Having a strategy that can help to pin point different market scenarios can potentially generate trading signals that dynamically adjust according to the current market conditions.
4. Have a trading routine and stick to it
Being a successful forex trader in the long term requires immense patience and discipline. In order to become a disciplined trader, you should have trading routine that you adhere to with great consistency. Just like you would when following a gym routine, you need to be committed and throw the excuses out the window.
Strictly following your trading routine including your trading plan, strategy, money management and analyzing the market with controlled emotions can be key to succeeding as a forex trader.
5. Learn from other traders and boost your perspective
As the old preverb goes, “two heads are always better than one”. It is no shame to learn and take ideas from other successful traders. There are many traders who are willing to share a wealth of knowledge that you can apply to your trading. As many of you will be aware, trading online can be lonely. Thus, having frequent discussions with other traders can be beneficial not just for our skills and knowledge but also our mental health. There are plenty of websites that connects forex traders through forums or online charting platforms such as Forex Factory, Myfxbook, eToro, ZuluTrade.
Summary of improving your trading routine
Hopefully you would have found something useful from the above points and you can implement them in your trading routine in an effort to improve its overall efficiency. Of course, the broker that you choose to trade forex online with can also affect performance. You may wish to view my page on the best forex brokers for some inspiration.