The 5-Step Forex Trading Routine to Increase Profits and Reduce Stress
When first starting, trading may be difficult as well as stressful. Any business where you’re directly risking your hard-earned money will make you sometimes nervous. However, things don’t have to be that way.
Trading is stressful since there are countless alternative ways to approach it, in addition to the financial hazards. , scalping, and using both technical and fundamental analysis.
Determine Support and Resistance in Forex
When you open a new chart, the first thing you should do is draw your key levels. These may be trend lines, horizontal zones, or technical patterns like a wedge or channel. You will have a plan for your future steps after doing this. Without them, you’ll soon find yourself chasing the market, which is the exact opposite of what you want to do.
The market should always come to you, not the other way around. So, after you’ve established these levels, all that’s left to do is sit back and wait to observe how the market responds when it reaches them.
Keep your trading watch list.
Maintaining a watch list is one of the finest strategies to lower stress levels and identify more lucrative deals.
Consider it your playbook for the coming week. It’s where you’ll assemble your weekly strategy, including the currency pairs you’re watching, interest rates, and even your biases toward other markets.
Having a compass to direct your efforts with a watchlist would be best. When a fresh trading week starts, you can trade anything that strikes your attention.
The majority of Forex traders make the same error.
Your trading is solely your responsibility. No employer will tell you how much to risk or when to trade; it’s all up to you.
Regular check-in during trading
This is the point at which so many traders abandon ship. After drawing their key levels and updating their watch list, they sit in front of their screens for hours on end when the market opens.
You might be surprised if you assume that because I’ve been trading currencies for more than ten years, I can only find setups in five or ten minutes. It takes little time to determine whether you should take action or remain passive once you’ve drawn your levels in Step 1.
Examine your charts at most three or four times daily if you trade the 4-hour and daily periods (which I prefer). After all, there are only so many 4-hour candles in 24 hours.
There you have it, then. When the 4-hour candles close, especially at 5 p.m. EST each day, check in a couple of times daily.
Above all, try to make your analyzing sessions as brief as possible. The longer you spend staring at charts on your computer, the more probable you will over-trade and ultimately lose money.
Update your Forex trading journal.
You need to monitor and measure the outcomes to expect to enhance your trading performance.
This is your chance to record your performance and identify your strengths and areas for improvement. That knowledge is essential in a firm where you are the only one between winning and failing.
You can use any way you like to remember these specifics. It may be straightforward, like a notebook, or intricate, like an online application.
I developed an internet trading journal with a built-in diary to record market activity years ago. Since I enjoyed it, I decided to grant members free access forever.
Whatever you decide, be sure it will be practical and straightforward to update. You won’t likely keep it up to date if it is difficult to access.
Last but not least, make sure the procedure takes 15 minutes. People with hectic schedules can squeeze out 15 minutes each day to update a trade journal.
On Forex | Wash, rinse and repeat
The final stage is to repeat everything you just finished again the following week. Establishing a routine like this may give your trading more structure, undoubtedly leading to developing profitable habits.
You won’t need to finish the first step every week unless you intend to add new assets to your list. You should frequently evaluate the precision of your key levels and make any required adjustments.
As the markets on your list developer, the good news is that you will only need to do this occasionally if you’re using the 4-hour and daily time frames.
The freedom that trading affords us is one reason it’s such a challenging enterprise. We may work whenever it suits us because no one is here to direct us. As much as our account will allow us to, we can also buy or sell.
All of that sounds wonderful until you factor in greed and fear. This infinite environment turns perilous at that point.