There is a big difference in how to think and act between a professional trader with an inexperienced trader that is 1). How market information is obtained and evaluated. 2). How exactly do we evaluate market information, depending on our mindset, that is our mental attitude and belief in forex trading field.
The mindset and beliefs that can make us independent and think like a professional trader is as follows:
1. Forex trading is not complicated! But easy!
Making Forex Trading is no more complicated than it really is. The first step is to remove all the things that are not important on the graph.
A less experienced trader usually uses an excessive Forex indicator or a trading robot, but this can dispel their knowledge of the basics of Forex Trading. It will not help you become a profitable trader. Too many indicators on the graph will make it difficult to see market opportunities.
To succeed in forex trading requires great discipline because this job is not easy. However, you do not have to make it more difficult than it should be with the use of inefficient and complicated trading tools. The best tool for success in the Forex market is simple graphics with candlesticks or bars. In addition, our own heads that contain the right mindset about markets and market participants are indispensable.
2. What is the right mindset in Forex Trading?
a. News and economic data are critical to success
News can affect the currency market. With news, it can make it easier for us to see the market situation, to determine the direction of the current market movement. Most professional traders make transactions using a simple trading strategy without ignoring the economic news that could affect the price.
So if you want to think like a professional trader, try to find information especially how they analyze the graph. Information we need to know besides the charts When will market players focus on the market? When will important economic data be released, or may there be a delay?
b. Use all the time windows for your forex trading
Based on experience, professional traders know there are different types of traders in different time window markets. A professional forex trader thinkers, must be aware and always focus on observing the behavior of other traders through the graph, then draw conclusions as the basis for conducting their own transactions in the market.
If you want to be a day Forex trader, opening and closing your trades on the same day, higher time frames such as weekly or daily charts play an important role. Do not make the same mistakes as many other traders and unlimited in currency pairs on a single time window.
3. Keep control of your emotions
It's true no one can turn off emotions like greed or fear. What we can do as a trader is to control those emotions. We must make the right trading plan for forex trading.
a. Appropriate capital management for forex trading
Most traders apply too high a risk to their capital transactions. This can cause a fatal error. Profit has not been realized as planned through profit / loss ratio, even got a loss, which means our entire capital transaction is exhausted.
Professional traders have financial management in managing forex trading account with predefined rules, such as:
- Per transaction stakes no more than XX% of trading capital
- Loss in a single day of trading may not exceed XX%
- XX% of monthly profit will be taken from trading account
- Etc
b. Limit your transaction amount
Many inexperienced traders take all the opportunities that are in front of their eyes. The goal is for long-term benefits.
To be able to analyze market conditions well, we need a trading plan that contains trading strategy principles and EXPERIENCES.
Unfortunately many traders are ignoring to quickly evaluate market conditions and intuitive actions that relate heavily to experience. The more someone is active and seeing the market properly, the better he or she sees market opportunities.
Remember! Knowing his theory alone is not enough to get someone to be an expert.
4. Make your trading document or journal
You need something to record all your actions, it plays an important role to shape your Forex trading way of thinking and learning. Something that is a Forex trading plan and your Forex trading journal. The Forex Trading Journal is a trader's diary. Mostly traders are undisciplined for long-term trading success.
5. Develop a predefined trading routine
Without having a clear trading plan, it tends to take a long time in front of a computer for a trader to trade and conduct market analysis. Develop your own trading routine and keep it in the Forex trading plan you create.
Get used to re-read your trading plan every day, so you always remember the rules that you have set up and make it a routine when you make a transaction.
Consider the following questions:
- Can I assess the current market situation?
- The market is in a trend or Range?
- Is there a relationship between different currency pairs?
- What kind of Trading Setup does the market offer?
- Do your trading transactions have the right profit / loss ratio?
All these questions you should ask yourself before you even think about opening a trading position.
6. Make a profitable forex trading strategy
Before you can make a trading plan, you must first master and master the trading strategy that you will apply. My trading concepts and methods are simple, trying to see the reality of the market. The market is the result of an action by an active market participant in it. Some traders have different trading strategies and different needs to succeed in the market.