How to Improve Your Trading Confidence
Forex trading is one of the most difficult career paths to take. With a lot of uncertainties in the market, it takes great confidence and knowledge to survive in the forex market.
As we all know, there is no such thing as a sure-fire trading strategy to be profitable in the forex market. It is all about finding high probability trading set ups and the outcome will always be unexpected.
There will be days when you win and some days when you lose.
The stress of forex trading may affect the trader mentally and may lose his confidence along the way. That’s why it is also important to learn not just trading strategies but also to improve your trading psychology and mental fortitude.
By having self-confidence, you have the ability to actively focus on better performance and staying away from negative thoughts that leads to anxiety and fear. It takes a lot of guts to put your hard-earned money on the line and the only way to do this is to improve your trading confidence with sufficient knowledge and practice.
However, is it still possible to remain confident even if you incurred losing streaks?
Here we will talk about a few things that will help you stay confident in yourself.
Focus on the process, not the profit
Almost every trader that we know chose forex trading because of the rewards that it can give you in return. However, as we mentioned in most of our previous articles, focusing too much in the returns of your investment may do more harm than good.
The forex market is highly volatile and the uncertainty of it is pretty high. There really is no sure way to make 100% profit in every trade. If you will focus mostly on the profit, it can destroy your trading plan. For example, you had a 2-streak win in a day, and you probably feel that the market is still in your favor. You planned another entry and placed bigger lot sizes on your next trade. The next thing you know is that the market is starting to reverse and every gain you made for that day is wiped out in an instant.
After this trade, you will start to feel bad then you will start revenge trading without even thinking twice. All you will ever think about is take back all of that losses. More stress will sink in, and your trading decisions will be further clouded thus incurring more losses.
However, if you focus on the process itself, you are focusing on the trading plan that you have. Whether you win or lose, your plan will dictate when to enter and exit a trade, and when to stop trading for a specific day, week or month no matter what the outcome of the trade is. This will keep your account safe and even if you will have a loss on particular day, your account is safe and this will halt further losses. Don’t worry about the losses, at least you can still trade for another day.
Remember, focus on the process first then the profit will follow. Being a consistent trader is the key in being profitable.
Keep on practicing
Just like in any activity or sport that we love to do, we always make sure that we are in top shape by practicing. Let’s put this into another perspective, if you want to be a great musician, you have to practice singing or playing an instrument. No person is born great. Every renown musician we know has put in a lot of hours in every year of their life to perfect their craft.
This also goes with forex trading, by practicing and putting in the effort and time, you will not only learn and execute your trades perfectly, but you will also adopt to the market changes and different market sentiments. At first this will be hard, but once you are exposed to the market consistently, you will notice that your body reacts immediately and it gives you a feeling of what to do right away.
This is one of the keys to self-confidence. Being successful is by preparing yourself for the field that you want to get into and reacting to what the market gives you will start to feel like second nature.
Your thought pattern in forex trading is fairly important just as your trading strategies and trading plan. If you truly want to be confident in yourself and in your skills, thinking on the Brighter side of things will improve your outlook not just in forex trading but also in your life.
If you haven’t noticed, most successful people not just in forex trading are all confident no matter what life throws at them. Your thinking pattern is your well-being. Whatever thought you have in mind will most-likely materialize. If you are preparing for a rainy day, you will have rainy days ahead.
If you focus on the bad things that are happening to you, more bad things are bound to happen ahead. Everything that we do is shaped by our own thinking pattern. You are reading this article right now because you are “thinking” of being a successful trader and you will if you really wanted to.
In forex trading, thinking positively may sometimes be hard especially when you have losing streaks. Instead of sulking and feeling bad about your losses, why not take it as an opportunity to learn more from your mistakes? Besides, doing something about it is better than sulking and feeling bad right?
Always mind your thoughts and think of the brighter side of things. If you think that you are going to be a successful trader, then you definitely will as long as you back it up with your actions and discipline.
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Information on this page is solely for educational purposes only and is not in any way a recommendation to buy or sell certain assets. You should do your thorough research before investing in any type of asset. Learn to trade does not fully guarantee that this information is free from errors or misstatements. It also does not ensure that the information is completely timely. Investing in the Foreign Exchange Market involves a great deal of risk, resulting in the loss of a portion or your full investment. All risks, losses, and costs associated with investing, including total loss of principal and emotional distress, are your responsibility.