In the world of forex trading, the one thing you have full control over is yourself.
Sure, markets can be unpredictable—you might experience the thrill of some winning trades and the disappointment of losing others. However, ultimately, how much you profit or lose depends on you.
Conducting thorough research and analysis is essential for generating solid trade ideas. Yet, you must always be ready for unexpected market events.
That’s why preparation and executing trades correctly are critical. These practices help you mitigate potential losses when the market throws a curveball your way.
Preparation involves maintaining an optimal risk-reward ratio, placing appropriate stop-loss orders, determining your position size based on risk, and, most importantly, adhering to your trading plan.
You have control over these factors, and achieving the best results is about optimizing everything within your reach.
“If you fail to prepare, you are preparing to fail.” – John Wooden.
For those unfamiliar with John Wooden, here’s a quick overview.
Considered by many as the greatest coach ever, Wooden won 10 NCAA National Championships in Men’s Basketball. His legacy is built not just on his victories but on his meticulous approach to basketball and life.
He paid attention to every detail, no matter how trivial it might appear. For instance, he even taught his players how to put on their socks properly, ensuring they wouldn’t develop blisters that might lead to injuries.
Wooden’s philosophy was simple: always give your best in whatever you do, and a crucial part of that is mastering what you can control.
Why was Wooden always so prepared? Because he outlined each practice session in meticulous detail, ensuring that when game time came, he had done everything possible to set his team up for success.
So, which habits could you develop to make you a more prepared forex trader?
I’ve highlighted three key practices:
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Journal Your Trades: Keeping a journal of your trades is incredibly beneficial. This log isn’t just about learning from past mistakes. It also helps you review your rules, uncover trading misconceptions, and even spark new trade ideas. Avoiding the same mistakes in future trades becomes much easier with a well-documented journal.
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Pay Attention to Details: Similar to how Wooden prevented injuries by insisting on specific sock-wearing techniques, in forex trading, details matter. Overlooking a minor detail—like accidentally adding an extra zero to your units—can result in substantially increased losses.
- Stick to a Daily Routine: Establishing a consistent daily trading routine is one of the best ways to ensure preparedness. Whether you’re dedicating time to catching up on market news or setting up your charts, a daily routine creates a structure that prepares you for whatever the trading day may bring.
Keep in mind, markets are unpredictable, and price movements won’t always align with your expectations. However, you remain in control of how you conduct yourself.
By consistently preparing for your trades, you reduce the chances of repeating old mistakes or making new ones.
