Join Paul every Thursday for the “Becoming a Better Trader” webinar. For details and a full line-up of all upcoming live events, please see the DailyFX Webinar Calendar.
In this webinar, I opened the field up for questions pertaining to a host of questions related to trading performance, ranging from psychology to risk management to trade execution and more.
One question asked was, “How do you avoid taking unnecessary trades?” It is imperative to make sure each trade entered fits within your game-plan. Every trader should have a game-plan which consists of analysis, trade entry/exit criteria, and risk management. It’s a good idea to talk yourself through each trade or have a checklist to keep you centered on only those trades which you should be taking. By going through a process of checking off the proper boxes you will find that many trades don’t actually fit into your game-plan, and thus will help you avoid those ‘unnecessary’ trades.
Another question asked was, “How many positions should I have on at one time?” This is dependent on experience level, but generally it is a good idea to keep the number limited and only focus on the highest quality set-ups. Too many positions creates a ‘noisy’ environment and can lead to trading mistakes which can be avoided with a more pointed approach. Taking into consideration correlation between positions is also important for overall account risk managment.
There were a host of other good questions asked, and most of the answers boiled down to focusing on the process of trading within the constructs of having a proper trading plan in place. For details, please see the video above.
Looking to further educate yourself about trading? See our Trading Guides.
---Written by Paul Robinson, Market Analyst
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