Forex trading is an extremely risky investment that requires adequate preparation from an investor’s perspective. It is of essence that the investor determines what he/she exactly wants to achieve before placing any trade. I’ll advice that you get a pen and write it down on a sticky paper. Do you intend on living off your trading? Do you wish to outperform the market? You need to spell exactly what you intend on achieving and stick this to your computer.
There should be the presence of a daily ritual, evidently I’m talking about something that you should be doing daily that is geared towards preparing you into each day’s event.
Staying focus is key for every trader. Your ability to remain focus all through the trading day will help form what type of trader you’ll eventually grow into. Trust me, the market is not a place for the weak at heart. For traders with emotional attachments to their positions, I’ll advice that you take the dog on a stroll to save yourself from panicking in front of your computer screen.
You’re likely to enter wrong positions when you’re panic stricken. As such it is critical that you if you find yourself in such a mode, then you should preoccupy yourself with something else i.e. getting out of the house, taking a quick break, etc.
- Eliminate Greed
When preparing your to-do-list, you should be wary of greed and as such eliminate every element of greed in your decision making. Greed has the ability to promote irrational and impulsive decisions. This is why you should set your goals for the day, work towards them via your set rules and be grateful for another successful trading day.
- Progress Report
In view of your set trading rules, you can make a summary of your previous starts, see if the same rules have paid off well or if you’re falling short. You can continue to stick to your trading plan if all goes well, consider a modification, if you’re meshed in some pitfalls, or a total overhaul, if the system is broke. Progress reporting gives you the confidence you need to determine that your trading rules are efficient enough for the market.
- Technical Alertness
Traders are faced with a variety of daunting challenges daily as they get ready to engage the market. The forex market is a highly risky investment marketplace, and understanding these risks is key. As such a well thought-out process must be designed to minimize such risk. This should be centered on your market approach and how you intend to tackle unforeseen circumstances, in view of capital preservation.
Your technical alertness when trading a demo account should be such that it is equivalent to that of a live account. This is essentially because in doing so you’re training yourself in good light. So don’t train yourself negatively.
- Precautionary Measures
There are some other steps that you should adhere to when preparing to start your trading day.
I’ll advice every trader to take some of these precautionary steps very seriously, some of which includes:
A backup to trading platform on your mobile device, as well as a battery backup system. This would enable you connect to your brokers’ platform in the verge of a power outage or an internet cut on your PC.
You should also have handy your brokers’ trading desk phone number, your account number and password. This is as a result of emergencies, as brokers do allow trading over the phone and these details are normally required to close, open or modify positions.
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