Why is there a difference between you and any other Forex traders? Why some achieve more winning trades and some more losses trades? These depend a lot on your trading habits.
Habit 1# Keep a trading journal
Always have a good practice to keep a trading diary of your trades into a journal. This is particular useful for checking and referring of old trades in the future. You also be able to pick up common mistakes that you may find. Things to take note in a trading journal are date, time, currency, lots size, price, time frame and target profit and stop loss. Do write down some notes on what causes you to trigger the buy or sell trade. It is due to technical indicator or fundamental news. And also write down what determine your stop loss and profit take pips.
Habit 2# Review your closed trades
After every trade, do some review on your trades. Try to answer all questions to why you win or loss that trade. And put up a mistake column and highlight it in another colour. This will warn you not to repeat the same mistake again. Another review is on your winning trade. Put up another colour to indicate that this set of trigger works for this currency. Especially if you are using technical indicator like moving average or oscillator, always mark out or highlights those triggers that give profitable winning trades. You may want to automate those winning strategy later on.
Habit 3# Understand what happen before you execute your trade
This is very important as every trade you entered is due to some situation or certain set of rules are true then you execute the buy or sell trade. A lot more information has to be capture if you are using multi time frame and many technical indicators. For losing trade, always look at why your set of rules fail, any fundamental news within the last 24 hours and other technical indicator which you may have used that can help you to strengthen the rules for executing this particular trade.
Habit 4# Trade when you are not emotional
Trading has to be consistent and not affected by one's emotional feeling. When you are not ready or not in the mood to do anything, then do not perform any Forex trading neither do you not perform any analysis of charts. Go take a break, short nap or relax by exercising, calm down your mental state then start Forex trading. You need to look at statistics and charts to determine your trade and not let emotion destroy your set of rules. With an unstable state of mind, many analysis can go wrong and causes losing trades.
Habit 5# Try paper trading your strategy first
Paper trading is always important for any new strategy. You need to test your new set of rules first by trading paper money using old historical price data. This is as close as real trading results you can get. Another way to speed up this lengthy process is using MT4 strategy tester using programming codes for your trading strategy. While this may not be reflecting real time trading, but it is a good guide to determine if your trading strategy is profitable or not.
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