How to Gain Confidence in Your Forex Trading Abilities
Being a confident trader is not something that just happens overnight. It is the result of consistently doing many things correctly for a long enough period of time. In fact, you could even say that consistency is the main ingredient for confidence in a trader. Many traders experience fear, doubt, and indecision while interacting with the markets, there are a number of reasons why this happens, but it is primarily a result of one or two things; not knowing exactly when their trading edge is present and (or) not being disciplined.
– Trade the daily charts
Learning to trade the daily charts before you look at any other time frame is something that will contribute greatly to building your Forex trading confidence. Trading higher time frames drastically increases trading success because it allows you to slow down and get a clear and relevant view of the market. Time frames under the daily chart can often produce many more “false” signals and market “noise”, this tends to result in over-trading for most beginning traders, and over-trading will greatly inhibit your ability to become a confident Forex trader.
The daily chart also is much more accurate than any time frame below it. This means that any price action signal on the daily chart carries more weight than a signal on the 4hr chart, and the 4hr carries more weight than the 1hr chart. So, by learning to trade the daily charts first, you will be taking much higher-probability trade setups, and this will obviously make it easier for you to develop into a confident trader. If you start by trying to trade the 4hr or 1hr chart, you will probably not gain a clear understanding of how the daily chart works, and thus you will take many inferior signals, this will make it very hard for you to build your confidence as a trader. It makes much more sense to take a “top down” approach to the markets; meaning,
learn and master the higher time frames before working lower.
– Master one price action setup at a time
By learning to trade successfully with just one of the price action strategy setups that I teach at a time, you will essentially become a “master” of it. You will know all the nuances of it and when it works best (in what market condition) and when to trade it and when not to. It is not just as simple as seeing a pin bar on a chart and trading it. You don’t always want to trade a particular setup just because it is present. In my Forex trading course, I teach traders exactly how, when, and why I trade all my price action setups, so you can take your time in learning to trade one at a time, then after you master one move on to the next. Before you know it you’ll have a very “sharp” set of Forex trading tools that will allow you to read and trade a “naked” Forex price chart.
Approaching my trading strategies with the goal of learning and mastering one at a time will help you to develop confidence as a trader. This is a much better approach than haphazardly trying to learn everything all at once. It is far better to be a “specialist” in this world than someone who just has a basic understand of many different things, at least financially speaking.
– Keep good records
In the opening paragraph of this post I mentioned that not being disciplined is one of the main causes of not attaining confidence as a trader. It is very true; not being disciplined in all aspects of your trading is a catalyst for inhibiting your ability to become a confident trader.