Every trader has room to improve their trading. 2014 is here and it’s time to get back to work.
The big question is how can we improve as traders? There are a myriad of ways such as greater self control, trading higher time frames, using price action strategies and triggers for trade entries and exits, and keeping a journal of your trading days to review both your trading progress and psychological progress as a trader.
Here are some suggestions to improve your trading for 2014.
Trade Higher Time Frames
One question I have for a forex day trader is are you trading to stay busy or are you trading to make money?
Generally, you’ll find traders that trade the M15 and smaller time frame charts are trading in the noise of the day. They’re typically traders that are trying to stay busy and prove that they are ‘day traders’. You’ve seen them, they sit in front of their multiple screens all day long, scanning the different currency paris for a trade entry, hopping in and out of trades. In the long run, they are rarely profitable. The stress and anxiety from the fear of missing or losing a trade wreaks havoc on their physical and psychological health.
On the other hand we have the trader who is based in higher time frame charts like the D1 and H4 (and sometimes the H1). These traders tend to be deliberate. They map out where they want to engage the market on their terms. They tend to be choosy about their entries and exits. If their entry doesn’t meet their criteria they pass it by. They are typically unconcerned about how long they are in a trade, as long as it’s moving toward their planned exit. They don’t spend all day in front of the computer, typically putting just a few hours per day. They know that higher time frames are where the money is made with the least amount of stress.
2014 GOAL: Trader Higher Time Frames
Use Price Action Trading Strategies
Using price action trading strategies like the ones we teach here in our Forex Market Master Price Action Trading Strategies Course give the trader a solid understanding of how the market moves and when to engage the market for the best possible odds of success.
Price actions trading is based on technical analysis using trend lines, support and resistance concepts, round numbers, candlestick patterns and risk analysis. When a trader has mastered price action trading they know exactly where, when, how and why they will make a trade before price reaches their intended entry zone. The price action trader has analyzed the charts in a top down fashion so they know where the action is likely to take place. They’ve calculated their risk before hand and understand exactly what they are risking to their intended reward. The price action trader has learned where to correctly place stop losses AND profit targets.
Price action trading means we don’t use fancy indicators. Indicators are lagging indications of what price action has already shown you will happen. They have no value in the market to the price action trader. Everything a trader needs to know in on the chart directly in front of them.
In short, the price action trader has taken the guessing out of trading. They know the why, where, when and how. Price action traders tend to be profitable and have a more complete and less stressful life.
2014 GOAL: Use Price Action Trading Strategies
Keep a Journal of Your Trading
Keeping a trading journal is so important to your progress as a trader that most traders who don’t keep one, don’t make it out of the lower levels of trading success. It’s one of the most important things you can do to improve your trading.
Journaling not only your trades but also your psychological and physical well being in relation to your trading can show correlations you may not have imagined were there. How much of your trading is tied up in how well you feel both physically and psychologically? I would venture to say nearly all of it. Journaling how you’re feeling physically when you come to the screen is important. Are you experiencing physical pain? Is there a correlation in your trading to how you physically feel? Did you fight with your girlfriend/wife before coming to the screens? Many of these questions can be answered and then addressed by using and reviewing your journal. There may be patterns hidden in your day to day trading that only by reviewing your journal can they be revealed. I’m not talking about only disruptive patterns here. I’m also addressing what’s happening with you when your trading is going well. Is there a relation to how much you slept the night before? You must be brutally honest with yourself, but not demeaning with negative self talk. Many patterns can only be revealed after a monthly review. Then quarterly reviews and so on.
2014 GOAL: Keep an Ongoing Journal of Your Trading Progress
I’ve laid out three specific over arching goals to shoot for in 2014: Trade higher time frames, trade using price action trading strategies, and keep a detailed journal of your trading in 2014 if you’re not doing it already.
Good trading to you all in 2014! May this be a record profitable year for everyone.