Becoming a Better Trader: Q&A Session
Join Paul Tuesday-Friday for webinars each week, for details please see the Webinar Calendar.
Today, in our Q&A session there were a lot of good questions asked and a variety of trader performance-related topics discussed.
We discussed the importance of having a game-plan and then ultimately being consistent in application – whether it be utilizing the same analytical tools, executing trades once proper criteria are met, or keeping risk-per-trade in a tight range so as to help ensure more consistent results.
One trader said they had a difficult time not getting caught up in the price action and swinging P&L while in a trade, and that it caused them to overtrade. First off, overtrading, whether it be with too much size or too much frequency, is a very common problem among traders. Before entering any trade you should have a high degree of conviction that the trade will work out, which means that the trade likely fits within your game-plan. You should be able to ask yourself before entering any trade, “Can I accept a loss on this trade should it not work out?” You should be able to answer with a confident, “yes”. If you can, then you are likely taking a trade within your game-plan and with risk within your scope of risk tolerance. Both necessary to managing a trade properly and seeing it through to either your stop-loss or target.
We also discussed various types of analysis, and which one is more superior than another. To begin with, there are a lot, and I mean a lot of ways to make money in the market. The key is that your analytical process isn’t overly complicated and clear-cut. You also want to be careful and make sure you don’t have any significant redundancies. For example, if a trader used a moving average cross-over for trend identification, Fibonacci retracement for determining support or resistance, and a candlestick formation they would be using separate, but complimenting analysis and entry criteria. Redundancy free.
For the full conversation, please see the video above…
Looking for trade Ideas? Check out our Trading Guides.
---Written by Paul Robinson, Market Analyst
You can receive Paul’s analysis directly via email by signing up here.
You can follow Paul on Twitter at @PaulRobinonFX.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.