Find this an interesting articles in the May issue of The Forex Journal (TFJ) and decided to write it down in my blog as a reminder to myself as well as for interested reader.
1. Evaluate your trading
Record the results of your trading activities diligently. What is your hit rate, average profit and loss? Be honest with yourself and assess what you did right and what went wrong. What can I learn from this? And most importantly of all - what am I going to do about it and when am I going to do it? For instance, if you discover that you struggle to continue trading during a losing streak, try to learn how to deal with the stress. If that fails, maybe you should consider a system with slightly lower earnings expectations but with a higher hit rate.
2. Do not lose your cool
The moment the market turns tense is the point at which the biggest profits are made - and the biggest losses! It is important that you do not allow yourself to be distracted regardless of the height of the waves. This is precisely the time you should be profiting from fluctuations and not being dragged along with the herd. Make sure you and your trading plan are the one stable factor amidst all the chaos.
3. Make sure you are 'fit'
Trading, especially day trading, is hard work. Make sure that you are not distracted by other matters and that you remain relaxed but alert. For a trader, being fit also means that his technical trading system and his expertise are up-to-date. It is not a good idea to sit and read your order system's manual during a stock market crash.
Placing orders and trading should come as naturally to you as accelerating and braking. Make sure you have an alternative for placing orders if your computer crashes unexpectedly. Put simply, being a fit trader means you can implement your trading plan with confidence and without misgivings. But do not forget, your biggest losses have yet to come!
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