How to Become a Better Forex Trader

Many tips on becoming a better forex trader require making big changes and getting out of your comfort zone. Is there a better way to adapt and apply such tips?

How to Really Become a Better Forex Trader

In order to stay comfortable and still become a better forex trader, all one has to do is take things slow, and evolve naturally. Change, as with all kinds of change in life, can be pleasant when it happens gradually, over time, so that we do not lose our comfort. Most trading tips are neither bad or good, they are simply general advice. In fact most trading tips can be used in creative and effective ways, when one relaxes the so called unbreakable rules, and bends theses rules as they see best. The best way to learn forex trading and become a much better trader, is to accept the fact that changes are required. Especially tips which focus on risk control and stop loss placement. These tips should be dynamic, flexible and not fixed, because markets themselves are dynamic and volatility changes all the time. When one trades like robot, trading becomes unappealing and more of a duty rather than a pleasant activity. Tips on stop loss placement attempt to incite fear in the trader’s mind, to the effect that markets are too risky and poor judgement can blow one’s trading account in no time. This belief is partially true, but the opposite is also partially true. Which suggests that being too cautious and afraid to take losses, results in using stop loss orders which do not really work in the long run. When stop loss orders are too tight, they simply are triggered way too often, and for no good reason. In fact, one could avoid getting stopped out in their trades, simply by using variable size stops, and looking more at markets and less at the money. Money management in general, should be more relaxed, and the rules making up that money management system should be flexible, at all times. One needs to focus more on the criteria for entering each and every trade, not exclusively on price action. And despite conventional wisdom, markets are actually not always right! Certainly not as far as instantaneous price is concerned, it’s the steady state that matters above all. But it only takes an instant of price action to trigger that tight stop loss.

 

The Relaxed Forex Trader

The relaxed forex trader, is a trader who does a lot of research before placing the trade, and actually worries about things, being the neurotic type of person that many situation in life require. But once the trade has been placed, the wise relaxed trader tries to do the minimum of research. This is because of various psychological reasons, and of course because of the well known confirmation bias tendency. Where wishful thinking takes control over impartial judgement. When there is a large size open trade in the market, the trader cannot longer look at the live forex rates without allowing those to cloud their judgement to some extend. Panic never helps, in fact it never helped anyone. It is one thing to be fearful and have the time to think about things, but allowing panic to take control is quite another. Panic never helps, and it almost always results in making a bad situation more complex and more difficult to deal with. The global forex currency converter domain is so complex and unpredictable at times, that even the best traders can fail. And it is not a mystery why they fail. Even the world’s most experienced pilots have crashed sophisticated airliners, only because few things conspired against them, all tat the same flight, creating moments of panic. One can actually learn a lot about handling uncertainty in extreme circumstances. From pilots who had their lives at risk, and then put things in perspective. And see how much less important trading is, regardless of trading results.