If it has been a while since you took up Forex trading, it is high time to improve your skills and get your trading techniques to the next level. But, you don’t know where to start. In this article, you will find some methods to improve your strengths and overcome your weaknesses. Before that you need to honestly evaluate your current performance and review these key elements:
- The balance of your profit and loss trades
- Your trading strategies
- Limitations and strengths
- Things that you need to improve
Once you understand your current progress, you can start improving your skills and adopting advanced practices. This is the time to step forward and avail of every opportunity before making a decision and forex traders like fxscouts.com is a perfect way to start your trading career. So let’s get started with the things you need to consider that will help you move to the advanced level of trading:
Read the Signs
The foreign exchange market is highly volatile. Even the small price fluctuation can leave you with high losses. Most importantly, when you are on leverage, you need to make additional efforts to minimize the risks. You need to properly analyze the market and enhance your skills to identify the perfect entry and exit points. Keep in mind that even professionals make mistakes. But, what makes them different is their ability to learn from those mistakes. You can do the same, but you need to understand the factors influencing your profit and loss beforehand.
Understand the Trading Signals
There are many different types of trading signals. Collectively, they include chart-based graphics and news events before taking a position. Trading signals will give you clear direction about the price moments at a given time. You can also identify the entry and closing point with the help of these signals. However, the choice to follow the market signals depends on you. But, when you are dealing with volatility in the market and have little experience with market evaluation, using signals as a source is a must. There are so many factors that affect the price fluctuation in Forex trading. Keeping eye on all of them can be difficult as this trading type is unpredictable. But, signals can help you understand the market’s ups and downs.
Calculate Your Expectancy
You can calculate the expectancy by using a formula. This formula will help you determine if your trading system is reliable, or you need to change your strategies. For that, you need to measure all your winning trades against losing trades. That way you can find your current progress. You can also measure the expectancy of your previous ten trades and evaluate the profit and loss status. Once you calculate the expectancy, write it down in your trading journal. Sum up all your wins and divide it with the answer. The formula to calculate the expectancy is:
E = [1+ (LW)]×P−1
In this equation:
- W=Average Winning Trade
- L=Average Losing Trade
- P=Percentage Win Ratio
Record Your Activities
Maintaining a trading journal will help evaluate your progress from time to time. This will motivate you as well as direct you in the right direction. Recording your moves and activities will give insights into your strengths and weaknesses. If you are consistent about trading you need to mark your daily activities in the journal. This is the proper method to scale up your operations. You can also create an excel sheet about your opening and closing positions and specify the strategies that you followed. That way you can understand what strategies suit you the most.
Evaluate Your Performance Weekly
Once you create a trading journal you can boost up your trading skills by evaluating your performance every week. That way you can come up with strategies for the upcoming week. When your goal is to expand your trading skills, you cannot do well without proper accountability. Also, study your weekly charts and notice the patterns that affected your trade. With proper weekly analysis, you can make the best plans and learn from your mistakes.
Adopting these steps in your daily trading activities will help you create proper strategies and define your path towards success. If your aim is to become a professional trader, you have to work harder and keep your patience level high. Increasing your proficiency level takes time. You may make plenty of mistakes at the start, but as you get the hang of these steps you can make the most out of your trades.