How to actually get better in FOREX trading

Lot of traders that are trying to improve their trading have same problem. They actually can't get better, while getting more knowledgeable.

 

After years, they are on the same place, only more tired and more educated.

 

Forex trading is strange.

 

Sometimes you get rewarded for making a bad decision. Sometimes you get punished for doing everything right.Our brains are not wired to operate in chaotic punishment/reward cycles.

 

When you decide to make a manual trading your career there are some pointers (I learned the hard way) that will help you achieve some measurable progress and advance more rapidly.

 

Write everything down.

Aggressive swing and hedge forex strategy traded by Chaos warfare MT4 EA

 

A lot of people have a tendency to jump from system to system. And that is OK.

 

But to make any progress at all, you need to write everything down. Write down the approaches you have already tested (signal, filter, conditions) and write down the result of your efforts (test period, winners losers, notes). Capture as much data as you can extract from the chart and account statements.

 

Insanity is repeating same thing over and over again expecting different results. I promise you, that after a year in the market you will stumble upon same principles over and over again. Make sure you avoid repeating the same mistakes.

Before you give up on system. Improve.

 

Once you spend some time with trading approach. It is infinitely better to analyze its weaknesses and see if you can improve it, instead of moving to next one.

 

Simply look at the chart and focus on the weak spots. Can you do something about it ?

 

Modify signal. Add filters. Avoid the news. Focus on the biggest weakness. Try to remove it without influencing systems strong points.

 

Almost always there is a solution.

 

This approach it's also the only way to master any trading system in forex. Don't quit the system on first signs of weakness. Improve first.

 

Try 50/50 approach.

 

Human brain is the most powerful pattern recognition device in existence. In fact, all that brain does is recognize, analyze and act upon patterns.

 

And it does so effortlessly.

 

Immediately, we know what we see with our eyes and we act upon it. We hear the sound. We understand the language patterns. Even though no one can exactly describe how the process works for him.

 

The concept of 50/50 approach targets capacity of brain to effortlessly recognize patterns.

 

  • First thing you need to do, is to remove risk/reward ratio from the equation.

 

Traders all around the world are trying to manipulate RRR, not realizing, that increasing the reward ratio will also increase the frequency of losers and decrease the frequency of winners. For a moment, you will ask exactly what you are willing to lose.

 

  • Second step is to remove all the indicators from the chart. It is also better to remove all the trend lines, but this is not mandatory.

 

Open as many charts as you can and trade. The one rule we have is simple. Every trade is entered with same lot size and with stop loss that equals target profit.Now you can focus on patterns in relationship with trend. There are no wrong answers.  In the worst case scenario, you trades will be chaotic, losing the spread and commission in the long run.

 

Do this for months, close as many as 10 000 trades.

 

You will notice strange confidence building up. Closely reminding the confidence of saying the right words in your mother tongue.

 

Progress can be easily tracked, by looking at ratio of winners/losers on account statement month after month.  This approach also removes the anxiety, stress and greed. It is also one of the best way to detach from the market.

 

Learn to create expert advisors

Expert advisors were working hard while I kept drinking beer after beer in Thailand.

 

Ability to create robots will give you a trading superpower. You will be able to look at the concepts, run a thousand of tests and be able to tell with near certainty, whether approach works or not.

 

Traders unable to test their concepts, will spend months looking into the dead end foxholes, asking the wrong questions and receiving uneducated answers.

 

Learning to create expert advisors is a skill necessary for any serious forex trader.

 

Also, life should be lived. Not spend in front of the price charts.

 

If you don't have the time to learn this craft, get someone to code it for you. Or get some MT4 system from us.

 

Develop discipline

Most traders are stuck, because they fail to develop trading discipline. What's the point of knowing more, if you keep making the same mistakes.

 

The distance between you and your goals isn't measured in winning trades. It is measured in perfectly executed trades. Win or lose.

 

To sustain discipline in trading you should strive to apply discipline in all aspects of your life. Those two, cannot be separated.

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ABOUT US

THEFOREXKINGS

“Trading FOREX since 2006. Full time trader and web developer since 2013. My two biggest hobbies are trading and web development. In TheForexKings I managed to connect both of them. Even after 12 years of trading I still have the same passion for the market as at the beginning. The aspect I enjoy the most : development and testing of new ideas.” 

 

Only in 2016 - 2017 we have created more than 400 forex strategies. During this period we have also developed and published +200 MT4 Expert advisors based on those strategies. We are dedicated to provide you with viable and complete trading systems that have thrived in extensive historical testing. We want to give you complete and transparent trading solutions, that once mastered ,will set you financially free. We want to give you a fighting and winning chance in the market. ” 

—  Marian, Proprietor of TheForexkings.com