Leading up to this month, we have a lot of volatility ahead and many retail traders are getting ready to cash in on these exciting times.
Based on my observation, what happens during these exciting times does exactly that! I.E. – creates excitement! This is important to remember because excitement is counter-productive when trading Forex even in the shortest time frames. Caution at times is thrown out of the window!
I follow a 5 step process to controlling my excitement and trade in accordance with the following strategies:
Create a checklist:
Be clear on the time frame of when you are trading and stick to that time frame! E.g. M15 time-frame is popular among short term trades and this is where you need to get your rules in a checklist form and subsequently read them before each session. After several years of trading you may not need to read the checklist again several times as this repetitive process can precisely in the same manner become second nature, and more intuitive! New traders can gain better results by following a simple plan. No matter what the temptation may be, if you are a trend trader, it is better to stick to that trend and wait for the retracement before taking the trade.
Create a reading plan:
Traders can gain a good deal of knowledge from reading while they are waiting on trades. I always have a couple of books on the go. Also keep up to date with news articles and other insights that can help nurture the mind. This is of assistance when I am in front of a screen and feeling impatient while waiting for a retracement to hit my entry point. Keeping the reading list running alongside creates a pleasant distraction which feeds the mind with positive messages, and when the trade is ready you are there to pull the trigger.
Create a Trader-buddy Group:
This step is important in helping you with your trading journey. With a like-minded group of Trading-buddies you can hold each other accountable for trading plans. A good idea is to distribute a few pairs among-st each group member and hold them accountable for their respective trade suggestions either on a Weekly, Daily, H4, H1 levels in just those pairs. You will find that in this way you can have a lot more trade suggestions, and different perspectives while keeping your attention to a small number of pairs. This sort of laser focus is what gets results on a daily basis into your account.
Create a reward plan:
Very often people choose to focus on challenging themselves on taking positive actions towards their goals. I suggest that for this month you create a list of rewards that you want to gift yourself with for weekly achievements. This will reinforce your unconscious mind on the basis that following the rules are actually creating loads of excitement for you outside of your trading hours. I feel this neurological connection is important, and the sooner you form it the better it is for you, so you can stay calm no matter how many tempting trades are around you. Making money through trades can be fun at times, but that only happens when you follow the rules!
Review, Review, Review:
Based on my observation, even though you can review your trades monthly, traders who review their trades daily and plan a specific performance review concedes better overall results. The sooner you know about what works, and what doesn’t, the better it is! This will help you not to delay pending orders for days to come. Furthermore, you will also be able to cut losses quickly or learn to scale into winning trades. There are so many things you can do for yourself on a daily basis, but a maximum of 5-10 minutes of reviewing what you did the day before can help you bring positive results. If you do this daily without failing, you will see a massive difference in your results at the end of the month! This is why I always advise my students to record their trades manually and write down the reason for taking the trade. When you write your review, write down what you did well and what you could have done better. Once you are determined, apply it to your next trade.
Traders! The above steps may seem very simple! However, I know they are difficult to apply on a regular basis. If you do apply them appropriately, you will get positive results that you wish for. My honest advice to all of you would be that you should be diligent and focus on what you want rather than what you don’t. You will then notice a positive change in every aspect of your life.
I look forward to hearing from you.
To your Prosperity
Psychology of Trading Specialist