5 steps to becoming a profitable trader

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USGforex

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Becoming a successful trader is not an easy task. Many people want to be successful trader, but forget that being a successful trader is a long and full of hard work process. There are several steps that a trader must get through before becoming a successful trader. The five steps mentioned in this blog will certainly progress your trading.



Step One

Design and Back test

The first thing you need is your own trading strategy. Without this you won’t know when to buy or sell. A strategy is deeply personal; you may find one on the internet but if it doesn’t suit your personality it is highly unlikely you will follow it. The best way to find your first strategy is simply look at the charts, look to see if you can find repeating patterns. When you find them write some rules around the execution and back test this strategy. After a decent sample size (100 occurrences) you will have reliable data so when you analyse your expectancy you can have confidence in it.



Step Two

Build your trading plan.

Trading plan is your outline of a given trade. It defines why you’re making the trade and how you’ll execute it.

A good plan takes into account your trading style, risk management, and expectations. It lays out your entire approach to trade, from the ticker to your entry, exit, goals, stops, and more.

Traders who build thorough plans and follow them are more likely to keep a level head — and less likely to make big mistakes.

Step Three

Do your analysis first so you are free to just execute.

This is a simple one, get your analysis done so you are simply waiting for price to reach your levels of execution, wait for price to confirm your thesis then effortlessly execute. This is very similar to step 2 but stops you entering sub standard trades and helps build the skill of patience.

Step Four

Start your trading journal

A trading journal is a log that you can use to record your trades. Traders use a trading journal to reflect upon previous trades so that they may evaluate themselves, and you should too! You can use journals to evaluate where you can improve your trading. They are a useful form of record keeping. Review your journal every 50 trades looking for ways to increase your edge.

Step Five

Remove your PnL from your screen.

Trading anxiety is a feeling where traders feel disturbed and worried when trading money or financial assets. This almost always leads to letting losses run too far but cutting winners too early. This results in you executing your profitable edge and ending up with a negative edge due to poor trade management.

If you follow these five steps you will be ahead of 90% of the retail trader community and well on your way to achieving consistent profitability.
 
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