4 Steps to Increase You’re Profitability in Forex by 100%

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Do you want to learn how you can improve your profitability by at least 100% starting from next trade you take? In this article we will discuss the most important thing that you can do that will increase your profitability.
Below are the key things that if you focus on them will give the best result with the least effort.

Check if you are in correct state of mind

Checking your state of mind is the most important things of all and most of the trader does not do it. That is the reason there is not a lot of successful trader around.
If you are angry or frustrated when you are placing trade when there a strong chance that you will not be able to give your 100% and you are competing with the world’s best when you are trading. So if you are not in the right state of mind close the software and take a day off the market will be there next day for you.

Determine the risk on this trade

You should have a set risk that you want to take on every trade. You should set a risk per trade in dollar amount at the start of the month and do not change it. So if at the start of the month you decide what you will risk $100 per trade then do not change it if you previous 2 trades need up in loss. You do never know when the next profitable trade will come so fix your risk and stick to it.
What I have seen happening in my trading is that at the start of month I set a limit but after some losing trade I reduce the risk on trade then that trade result in profit. Now because I have set a smaller trade then I should have the profit is also reduced. If at the place of doing that if I have stated with the same risk then I might have covered all the loss.

Do you have a stop loss and profit target?

When you see a trade do not jump and just try to trade it without a plan. The plan is your stop loss and your profit target. You should determine the lot size that you need to trade so that you do not cross the risk that you have set for this month on your trade if it goes wrong and you should know when you will get out when you start.

What is your risk reward ratio?

If you have followed the entire step above it will be easy for you to answer that question. If you do not know the answer then you should not be trading period. If you really want to make money in the long run in the market then you should focus on your risk reward ratio. Because if you have a ration less than 2:1 then it will be a lot harder for you successes in long run.
A good ratio to target is 3:1 or even better is 5:1 but never less than 2:1 if you really want to make money in the market.

This are some of the things that you need to do if you want to make money in the market in the long run. If you want to make big money in the market then you should focus all you energy on your risk reward ratio first and when you have if above 3:1 on every trade. Then you should focus on your success ratio.

Trading is simple as anything in life but it is not easy.

3 Things That You Can Do Now To Improve Your Trading

Improve Your forex Trading

If you find yourself in a situation when you are not able to make profit for a long time. Then it is time for you to change something in your trading.

I am talking about things that you can do now to improve your profitability. The first thing that you need to do is reduce the number of trades that you take.

Second thing that you need to do increase your time frame if you are training now on 15 minute chart then start trading at 1 hour chart the best is to trade on 4 hour and daily chart. Also focus on the quality of trades because when you make fewer trades you can really pay attention what you are doing and how can you improve. It can be hard for you at first but you will learn to do it.

The best thing you can do is focus on daily charts. It will not be profitable at first and most of time you will not be able to make out trades but slowly you will be able to see trades and make them it will change your life.

1. Good records

Start keeping good records of you is trading one of the reasons most of the people are not able to learn anything because they do not know what it that they have done wrong so to find the main problems in your trading you need to keep good records.

When you keep good records you can pin point the mistakes that are costing you the most and make change accordingly.

2. Reduce number of trade per section

What i have found in my trading is that when I trade on emotions I make wrong choices so to reduce that what i have done is reduce the number of trades that i can make during a session. Now I only make 1 trade per section so this reduces my emotional trading and made me profitable.

Thing that I learned with a close observation of my records it that when over analyses I make trading mistake so to solve it what I have done is to simply look for trade one time if nothing pops out then close the trading terminal and that is if for that trading section.

There is going to be profitable trade and losing trade it does not matter because trading principles will pay you in long run. You need to follow whatever trading principle that you have made no matter what is the imitate results are.

3. Simplify your charts

If you have too many indicators on your chart you will not be able to make good trading decisions so reduce the number of indicators on your chart.
You only need two things price action and volume anything more than that is just distracting you from making right choices.
When you start doing trading with a simple chart you will see that stress is reduced substantially and you will be able to make better trading decisions based on just two things price and volume.

Less is more in trading. Less trades you make, less things you have on your chart, less rules you have in your trading system. You have to do only do two things to make profit in trading find the trend and then trade the trend. There is nothing more to trading then that. Money management is an important part of all this. Happy trading.

Year Review 2014

2014 trading review

2014 is being a long year in my trading I have seen some ups and down this year.

There are somethings that I have learned in the process. In this post I am going to share some of them with you. So that you can make good and profitable trading decision in year 2015.

 

Make trading a habit

You have to understand one thing that in this life you will only become good at something if you invest yourself fully in it. So make a commitment that you will make trading a habit. Like brushing your teeth you do not think about it you just do it.

In the same way you will trade your plan without thinking. Like it had become a habit for you.

Make and follow trading rules

It is the second most important thing in trading. You have to have some rules that are guiding your trading decision because without them you are lost. There so many things that you have to think about when you place your trade it is a good idea to make most of them a habit.

You can only make them habit only if you have trading rules and you follow them all the time. That is how you form a habit. After you have set rules and you are following them every day. If you not making profit then you should look at your rules then make changes accordingly.

 

Keep good records

“If you can not measure it, you can not improve it.”  Lord Kelvin

It is important that you keep good records and make a weekly analysis of how you are going in your trading. You have to look for things that are not giving you results that you want in your trading and change them accordingly.

Make record keeping one of the steps of your trading process. What I like to do is that when I spot a trade I open my excel file where I keep my records. And enter details of the trade like lots, open price, stop loss and everything in it before entering the actual trade in the market.

 

Never place a trade without stop loss

You have to live by this rule if you want to stay in the business of trading long enough that you can make it a full time job. You should always know what is your risk on every trade that you make before you make it.

Trading is not a sprint it is a marathon so it is important that you have mentality right. If you place a trade which beyond your risk threshold that you will be in process of ruining your hole trading.

You have to keep trading the way you were before the drawdown and also be patient. There’s always part of a trader’s psyche that wants to make losses back tomorrow. But traders need to remember you lose it really fast, but you think you make it up slowly. You may think you can make it up fast, but it doesn’t work that way.  -David Druz

 

Learn to handle losses

In trading you will have profit and losses you cannot run from it. You can do only one things that is to learn to live with them. It will make your trading a lot more better.

15 Rules Of Becoming A Great Forex Trader #4

This post is a part of great Forex trader series. Today we are going to discuss point 4 which is “Your biggest loser can’t exceed your biggest winner.”. You always have to make sure that you’re biggest losers in not greater then your biggest winner.

You should keep a record of all your trades. For example if you have a profit of 15 points on a given day then you should not make trade which have risk more than 10 points. So that you will have a winning day on your book. No matter what. So that you can make consistent money.

In all your trades you should focus on making at least twice the risk you take on a trade. You should fix your trade risk in amount at the start of the month so that you can make trade accordingly.

For example you have capital of Rs. 50,000 and you decide to take a risk of 1% of it so you’re per trade risk after commission should not be more then Rs. 500 or less. And your profit should be at least Rs. 1000.

We cannot control what market do. But we can control how we trade the market. All the profit that you will make will depend on how good are in doing that. This part end see you in next part.

 

15 Rules Of Becoming A Great Forex Trader #3

This is third part of great Forex trader series. Today we are taking about third point which is “Never turn a winner into a loser.” What that simply means is that you should let your profitable trade become a loss in your book.

How can we do that? We can do that by trailing the stops. When market moves in your favor 5 or more points. You should update your stop to your entry point. As the price keep on going in your direction you should keep increasing your stop in the direction of the trend.

You should always move your stop in the direction of your trade. What it means is that if you are long on a given trade you should increase you stop. If you are short on your trade you should decrease your stop. Not the other way around.

When I started trading Forex I did not trail my stop due to which my profitable position become loss.  Because the market reverse after a significant increase or decrease. So you should learn about conserving your profits so that you can keep your profits.

You can learn more about placing stop and different types or stop and basics about technical analysis in

Technical Analysis of Stock Trends Robert D. Edwards. I have read this book many times I learn something new every time.

15 Rules Of Becoming A Great Forex Trader #2

This post is part of the great Forex trader series today we are going to discuss on why it is important for your trading success that you “Always lower your trade size when you’re trading poorly.” 

 

When the trades that you are making are not profitable and you have more than expected losing trades then you should with your given system. Then you should reduce your trading lots to minimum that your broker can allow till you start to make profits again.

 

This will help you to reduce your draw down and reserve your capital for future trading. When you start to make profitable trades systemically start to increase your trade size again.

 

What I do is when my capital is 10% lower than the starting amount I started the month with I reduce my trade lot to 1. When I have a profitable week then I increase the lot to two.

 

If I have two consecutive profitable weeks then I start taking 1% on every trade that I make. I also make it necessary that every trade that I make should have a risk reward ratio of more than 1:1.5 or higher.

 

That is it for today tomorrow we will discuss about Never turn a winner into a loser. See you tomorrow.

If you want to become a good trader I highly recommend reading Come Into My Trading Room: A Complete Guide to Trading (Wiley Trading) by Alexander Elder

 

15 Rules Of Becoming A Great Forex Trader #1

This post is part of the great Forex trader series today we are going to discuss on why it is important for your trading success that you “Be disciplined every day.” First things that we have to clear out are what I mean by DISCIPLINED TRADER.

What conclude of being disciplined every day?

  • Have a trading plan.
  • Enter trade with according to your trading plan.
  • Keeping a good record.
  • Analysis of your trade after it is over.
  • Following the money management while trading.

So these are things that you need to do every day when you are trading. So if you have made a written trading plan. Which is complete mean have reasons to buy and sell when to trade? Where to place your stops? How to take profits?

You should make all your trades with accordance with your trading system. You should follow your trading system every day and make every trade by your trading system. If you are doing that then you are a disciplined trader.

Read Disciplined Trader: Developing Winning Attitudes by Mark Douglas  it’s a great book.

 

Why Having A Trading Plan So Important For Trading Success

It is very important to have a trading plan if you want to succeed in your trading. Here is something that I learned while trading with my trading plan.

 

A Disciplined Way For Trading

 

It gives a structured way to trade the market of your choice. There is no reason not to trade if your system is giving you a signal to buy or sell.

Even then you are not trading then it is not the problem with the system but in you psychology.

 

A Structured Way To Trade

 

A well-defined plan give you structure to trade so that you can find the not important things that you are doing while trading and focus all your attention on what is most important like the Pareto principle.

 

Improve Your Profitability

 

If you focus on the most important and trade with a structured system you will become more profitable.

 

Give You Clear Idea Were You Were Wrong

 

When you analysis what trade you have made with your system in past you can determine where you were wrong and correct it.

 

Consistency

 

A system makes you consistent in your trading which is the most important thing of all.

 

If you do not have a trading plan in place this thing will not come to your trading and you will never become a professional trader.

 

15 Rules Of Becoming A Great Forex Trader

I have been trading Forex for some time this are some the rules that I found that will make you a great trader if you follow them 100%. I have been keeping record of my trades and find out that whenever I loss this is because I fail to follow one or many of this rules.

I will explain this rules in detail in coming post here is the list.

  1. Be disciplined every day.
  2. Always lower your trade size when you’re trading poorly.
  3. Never turn a winner into a loser.
  4. Your biggest loser can’t exceed your biggest winner.
  5. Develop a methodology and stick with it.
  6. Be yourself.
  7. Earn the right to trade bigger.
  8. Get out of your losers.
  9. You always want to be able to come back and play the next day.
  10. Don’t worry about news. It’s history.
  11. Love to lose money.
  12. Never take a big loss. Only a big loss can hurt you.
  13. Make a little bit everyday.
  14. Consistency builds confidence and control.
  15. If your trade is not going anywhere in a given timeframe, it’s time to exit.

This is the list we learn in more detail about them in coming day.

 

Fear Of Loss And Trading

When you are trading if you have a constant fear of loss then it will be very hard for you take trade. And if you do not make trades and then market go into your direction you feel the loss again because you have loss the opportunity to make profit.

 

How to overcome fear of loss?

 

Master one trading method

You should master one method at a time. So that you know when your are entering a trade you are certain of your position.

 

Always place stop loss with your trades

Place your stop loss before placing your trade. So that when trade goes against you, you get out of the trade automatically.

 

Ask yourself what is the real reason behind your fear?

Do you really know what make you fear. If not then find out and get over it.

 

When do start to feel fear?

 

At what stage of trading do you think your fear start to kick in like when you see an trade and then the market start to go in another direction. Or when price bounces at you stop level.

You need to find out the source of fear and then eliminate it. Fear is caused by lack of knowledge when you have knowledge there is nothing to fear.