Trading resolutions you should be making in 2019
Every year millions of people all around the world become part of a trend called “New Year, new me” and sit down to make a list of new year resolutions. A month after, and these resolutions are either somewhere under a load of papers or forgotten altogether. I know I personally found it much easier to list them than to actually work on achieving them. But there are some resolutions that are definitely worth the effort. Especially if they can save you money, reduce your stress and make your trading less challenging.
So, what can you do as a trader to prepare yourself for the upcoming year? What type of goals should you be setting for yourself? Which habits should you be obtaining on the way? I would recommend starting with the 4 below. “Start small, think big” as people say.
Control your investments
The market is a force that cannot be controlled. It lives its own life and can be completely unpredictable at times. That’s why every trader has faced trade losses at least once. It’s just something every trader new or experienced has to accept and understand. What you can control is the number of your losses. Enter stop-losses! According to Admiral Markets, “a stop-loss is an order that you place with your FX broker and CFD Broker in order to sell a security when it reaches a particular price. A stop-loss order is developed to reduce a trader’s loss on a position in a security”. Setting stop losses and using them in your day-to-day trading, can significantly help you manage your investments, and protect you from losing more than you can afford.
Do your homework
Let’s go all the way back to school for a moment. Remember how you had to sit and look through hundreds of books to prepare for a test or to write a paper? Well, think of trading as a test. To get a good result, you need to study. You need to dig up everything you can find on the subject, analyse it and make notes on it, to help you remember the information obtained. Keep up to date with as many economic events as you can, study charts, think which setups would work the best with them. Take time to sit and write down all the changes that happened on the market today. Make notes about why each change happened, what affected it and what effect did it have. Keeping track of the statistics and having even simple descriptions next to them, will allow you to plan better and form a thorough trading strategy.
Don’t trade when you’re in a bad mood
Had a bad day? Got into an argument with a friend? Barista at the coffee shop served you with the wrong coffee? Think all these things have no effect on your trading? Think again. An article in Psychology Today called “4 Ways Emotions Can Screw Up Your Decisions” rightly points out that “Anxiety in one area of your life spills over into other areas”. Another article in Science Direct, called “Stress and decision making: effects on valuation, learning, and risk-taking” also explains that “stress may promote increased risk-taking/reward-seeking even when this leads to disadvantageous outcomes”. Everything that goes on in your life can influence your trading. If you are feeling happy, and extra lucky, you are more willing to take bigger risks. If you are feeling sad and agitated, you may exit a trade too early. So, if you understand that right now, you are not ready to make calculative, cold-minded decisions, step away. Take time to get your emotions together, and then go back. Not only will you see a difference in your trading, but your nervous system will be really thankful.
Be your own hero
Why did you start trading? Chances are because you read about someone’s success story. When you just start trading, you have a certain persona set in your mind, who you want to be like. You might even be reading their blog, trying to use their tips and tricks, thinking that they can do no wrong. What you don’t know, is that in trading there is no perfect strategy, no correct answer for everyone. No trader, even the best one, can always be right. Instead of aspiring to be like someone, aspire to be you. Learn from your mistakes, find the niche that you feel most comfortable in, develop your skills and take meaningful profits. As I mentioned numerous times before in my articles, confidence is key in Forex.
A new year is a great chance to forget your fails and focus on your wins. We can all miss a step once in a while, but it’s the ability to find strength, get up an continue, that separates winners from losers. Use every experience you get, negative or positive, to learn and become a better version of yourself. Just as in life, in trading you win some, you lose some.
Author: Nadia Ivanova, PR & Digital Marketing Manager at Qobo Group Ltd