Foreign exchange novice investment more or less such problems, foreign exchange novice investors need to face these basic problems, and then to master it, understand it, in order to navigate the foreign exchange market.
1. The ability to analyze the trend direction requires a lot of learning of technical analysis theory in the early stage;
In the later stage, the actual review and summary are needed constantly. This process is quite long. As for how long it will take, it depends on the efforts of foreign exchange investors and their own understanding.
2. The ability to design the profit and loss ratio. When the knowledge learned can often judge the right direction in the actual trend, then you should consider how much stop loss you can give to keep your account safe, or to ensure that you do not lose too much on each order if you do wrong, and how much profit you can see with this level of analytical ability.
Design your own break-even ratio;
3. Trading decision making ability The first two abilities are the most basic and not very abstract abilities, which can be achieved with hard work. When you accumulate the first two abilities, the real problem you face is the accumulation of decision making ability, that is, you not only need to analyze the trend direction and calculate the profit and loss, but also make a decision immediately afterwards.
4, patience holding capacity When you have reached the first three levels, then you do the right direction of the order, the most need is your patience, most of the time, you do the right direction, but just opened the position, the market will not move, only a small range of sideways shock, this time is very uncomfortable, liquidation is not unbalance is not, many times after a small loss can not bear to level out.
And after you close the position, the foreign exchange market out of dozens or even one or two hundred points, you begin to regret;
And sometimes, after you close your position, the market goes the other way, and you start to congratulate yourself, which is not true, because long-term speculation is not a fluke, because you don’t stick to your stop loss position, even if you get lucky once, but you don’t really accumulate this ability, so when you have the first three levels of ability, then you should trust your judgment and stick to your stop loss.
You’ll do well in the long run.
When you have enough trading experience and market knowledge, there are periods of emotion and poor execution that can lead to “bad trading.”
Experienced traders are probably familiar with the Yerkes-Dodson Rule, a scientific principle discovered in 1908 by R. Myers and J. Dodson, two psychologists, based their research on biological psychology and neuroscience.
Yerkes-Dodson Law is now used to describe the relationship between the level of emotion and the performance of traders: when the level of emotion rises to a certain level, the performance also rises;
As emotions continue to rise beyond the arc, performance begins to decline because the emotional system blocks your ability to think.
So there’s not a simple inverse relationship between emotional and operational performance.
However, due to the extreme speed and intensity of the fluctuation of the foreign exchange market, in the face of the larger than expected retreat range and retreat time, the emotional fluctuations caused by your psychological pressure will usually hinder your thinking, and even face the loss of control and sanity of trading.
So, here’s a way to avoid emotions as much as possible, make trading more rigorous and standardized, and create your own trading list.
It’s a simple and easy thing to do, but it can help you a lot.
Senior traders tell us that it is important to build your own trading list.
By doing so, you can transform yourself from an unplanned, blind trader to a clear-thinking trader.
But at this point many traders may ask “why?”
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Here’s the answer to that question and how to create a trade list.
The goal is not to create an excessive cult of the trade list.
When you think of professional forex investors, most traders do not bother to understand their trading plans or trade lists. They are more interested in the specific practices and practices of professional traders in various market conditions.
All of this seems to be right, because it is these elements that are most immediate and easy to focus on that often attract us to a successful person.
But the truth is, most of us don’t like using a trade list just because we’re lazy. It’s more because we feel like our natural activities are being disrupted by using a trade list.
Why do you need a “trade list”?
As the saying goes, a good memory is better than a bad pen.
In addition, writing down your trading goals can help you focus better: as humans, we are not omnipotent or have unlimited power.
Even with technical support, our bodies and energy are limited.
In fact, it is the list of trades that you tend to overlook that is the most important driver of success. It will refresh your mind in the chaos of trading, keep your money curve in line with your tolerance, and make your philosophy and practice better integrated.
The application of the Trade list in foreign exchange trading is very simple, you just need to follow a few steps.
Ignoring one of these steps can take you from profitable to unprofitable.
Antour, a famous trader, once said: “In complex trading situations, the role of the trade list will be highlighted, it is even a necessary condition for success.”
Brian Tracy, on the other hand, believes that everything in your life can be put on a list to remind you of what you need to achieve in the future.
The forex trading list should include elements of all the actions you will take before entering the market to open a position.
Talk to any successful forex trader and you will find that they are very disciplined and their daily trades are carried out in precise steps.
As ordinary traders, our goal is to eliminate confusion from our trading activities through our trading lists.
This means you have to be meticulous in every step.
Trading list Records: Trading history A personal trading history is a good guide to ensure that each exit success or failure is tracked, providing a preview of the next opening.
This requires recording the details of each of your trades, such as the currency pair traded, the opening date, the closing date, the size of the position, the buying price, the stop-loss level, the profit-taking level, the selling price, and the total profit or loss.
Making a simple spreadsheet to record the data will be very useful for you in the future.
Trade list recording: Market Watch traders also need to incorporate their own understanding of the market into their trade list, as this will help you know why you made the trade decision in the first place.
It also allows traders to see if their market observations are helping them make a profit.
With the development of this habit, traders will gradually be able to filter out the available trading opportunities (such as certain economic news events).
Typically, a trading strategy consists of three parts: Signals: The tangible signs you need to see before you consider entering the market.
Entry: How you enter a trade, risk, etc.
Exit: The rules for your exit (stop-loss exit, profit-taking, etc.) should be kept as detailed as possible and adjusted with experience and time.
The signal is usually the most important part because it involves several steps (looking at trends, indicators, establishing a range of oscillations, etc.).
The best way to build a trade list is to go out of your way to document every step of the trade in detail and then test and verify it.
Ask yourself a question: “Should everything be clear and understandable?”
If it bothers you in the meantime, then you should pause and revisit your trading list.
How to use your “trade list”?
We use this list as a test case in the field, and once it covers all the steps, we print it out and put it in front of our computer.
Get into the habit of checking your list for every trade and quickly reviewing your list before you enter.
You may forget to check your list at first, but as long as you keep reminding yourself to repeat this step, you’ll eventually become a habit.
You’ll check the list without any extra reminders.
You’ll be surprised at the results of the final trade list.
Conclusion Trading discipline is called the soul of the trader, which refers to the behavior of controlling operational risks through macro analysis in the process of trading.
All successful traders agree that in financial trading you can get the analysis wrong, you can get the direction wrong, but you can’t do it without discipline.
If the direction is wrong, you can start again. If the trading discipline is not followed, you will be kicked out of the market sooner or later. Because each trader’s capital is limited, the trading discipline can effectively protect your capital.
