The most effective traders hone their skills by practicing with proper discipline. Also, they perform self-analysis to assess what drives their trades and learn to keep fear and greed out of the scene. However, these are just some of the skills any forex trader must practice.
The Goals and Trading Style
Before going out on any journey, it is imperative to familiarize oneself to the destination and the way to get there. Similarly, it is also equally important to set clear goals in mind, then ensure the trading method is capable of reaching these goals. Every trading style differs in risk profile, which needs a certain attitude and approach to trade successfully.
For instance, if a trader can’t go to bed with an open position in the market, then the best thing to do is to consider day trading. Meanwhile, if the trader has funds and sees that it will benefit from the appreciation of a trade over a period of a few months, the person may be more of a position trader. Keep in mind that personality also fits the style of trading a person undertakes. And a personality mismatch will end up in stress and certain losses.
Choosing a Trading Platform and Broker
There are many trustworthy brokers out there, And choosing one is of paramount importance, and spending time researching the differences between brokers will also be of great help. Always remember to note each broker’s policies and how they go about making a market. For example, a trade in the over-the-counter market or spot market is different from a trade in the exchange-driven markets.
In addition to that, guarantee that the broker’s trading platform fits for the analysis made. For instance, if a trader wishes to trade off of Fibonacci numbers, the trader needs to check if the broker’s platform can draw Fibonacci lines. Also, a good broker with a poor platform or the other way around can be a problem. So, always make sure to get the best of both.
The Entry and Exit Points
A lot of traders get confused by conflicting details that occur when looking at charts in different timeframes. Then, what shows up as a buying opportunity on a weekly chart might actually become a sell signal on an intraday chart.
Thus, if traders are taking their basic trading direction from a weekly chart and using a daily chart to time entry, check first if the two synchronizes. To put it differently, if the weekly chart is providing a buy signal, wait until the daily chart also confirms a buy signal to keep the timing in sync.