Step 1 – Methodology
The 1st step is to find a systematic rule-based approach to currency trading nz markets that has been proven to work, either by computerized backrests or manual testing. This is extremely important because without a validated strategy you will not be able to build confidence in it and will likely just end up losing money and increasing stress.
Make sure you stay away from canada forex market open that do not have clearly defined rules you can program into a computer, the rules should be simple and not require interpretation otherwise the results will be inconsistent. This step must be completed properly, if you do not then the string of losses you will likely experience will make it very difficult to continue following the strategy and you’ll either stop trading or jump to the next strategy and repeat the losing process.
Step 2 – Confidence
The 2nd step is to gain confidence with the strategy by understanding how it works, why does it make money? Really understand the backtest results, know the type of markets it works in best, then either paper-trade it or trade it with a small position size for a while to get a feel for how it behaves.
This process can take some time so don’t rush it. Also, don’t assume you can trade it just because you know the rules and have read the backtest report; there is a large difference between knowing something and doing it, so while you may think you can handle the performance characteristics of the system it can be an entirely different scenario once you’re risking your own money with it.
Step 3 – Discipline
The 3rd step is to gain discipline by following the strategy religiously. This is very important because not following the rules will erode your confidence and invalidate the results.
Make sure you resist the temptation to constantly ‘tweak’ the strategy rules, especially based on the results of a small number of trades. All strategies have winning periods and losing periods and the results are not defined by any one trade, rather you need to apply the strategy over a large number of trades to let the edge work in your favour.
If you find you constantly want to change the strategy or can’t enter or exit best stock trading platform uk when the strategy requires it, you lack confidence in the strategy and the only solution is to stop trading it and go back to steps 1 and 2 again.
Go do it!
By following these 3 steps you can become a more disciplined trader. It won’t be easy, there are many challenges in trading as indicated by forexbrokerssouthafrica.co.za, but if you remain persistent and are always looking to improve you give yourself a much better chance of being a successful trader.