Revise your trading strategy periodically
We always face problems with our jobs. Whether it is making mistakes preparing paperwork or your poor performance in fieldwork, it will happen now or then. This is a fact for humans. They make mistakes even when they don’t want to. But, it’s the fun in being a human. You can change yourself and when you do so, the environments around your will be so pleasing. You will be able to make a better outcome and most of the time it gets fixed in our profession. In the trading business, you will also experience problems with your trading approaches. That is what makes this business fun. A trader gets to learn properly. In this article, we are going to discuss how you should react if a trading approach of yours turn out to be a bad one.
Don’t go and open a trade
If you are having a problem with your business, the first thing you should be doing is not open a trade. As your approach is not right, the results from the previous trades at an instant, will not be good. You will see some consistent losses in your account. That is the indication of your trading approach is wrong. In this case, your trades will not make any return unless the plans are changed. So you should stay away from executing trades. If there is one open, you should close it and concentrate on the next job. It is like staying away from dust when you have allergies. So, indicate your allergies and be safe with your trading account.
Learning from your mistake
Committing a mistake at the initial stage is normal. For this reason, it’s highly recommended to use the spread betting demo account for the first three months. It will help you to develop your skills without risking any real money. Instead of thinking about big winners, start concentrating on high-quality trade setups. Start maintaining a trading journal as it will help you to assess your past trades. Try to find the weakness in your trading strategy and fix those problems. Be a dynamic trader who can adapt to the changes of this market.
Analyze your trading plans
Now that you have made your trading account secure, it is time to look at the defects. It can be anywhere in your trading plans. If your position on trades is not right, you are not using proper strategies. There are a lot of simple as well as advanced strategies for finding out a good position for a trade. Using support levels, the pickup or the resistance points, the Fibonacci charts, and time frames etc. are really known tools and strategies for almost any trader. If you are winning trades but the profit is very low in each trade, there are problems with your money management plans. You are risking too much for a small position size. On the other hand, you can avoid the position size calculation. If you do that, you will be losing a good trade just by not finding out when to close it. For every bad reason, there are indicators in your trading business. You will just have to do a proper analysis.
Find out where is the problem
What we have discussed in the previous section of this article should be in this one. Anyway, there is a lot more where that came from. If you want to be a good trader, you have to indicate the defects in your approach. For that, you have to analyze the way you are approaching a trade. We have already mentioned how you can find out the problems in your plans or strategies. Then you have to think about how to change those defects and turn into positive plans. If you manage to turn every negative around, your business will be successful one day.