One among the more useful skills in forex trading is knowing when to press your advantage. This may increasingly be in the shape of accelerating reward-to-risk ratios by adding to winning positions and even just logging in additional trades.
Pressing your advantage is skill to have, but sometimes this strategy can get you into trouble.
As an alternative of waiting for the appropriate opportunity to press their advantage, some traders turn out to be impatient and/or desperate for the market to maneuver. They need things to occur immediately.
An impulsive trader, for example, would proceed so as to add to a position regardless that he had identified a ranging market, all because he wants to maximise profits. He consequently gets stopped out and botches his winning trade.
However, trader would press his advantage only when trading a trending market by scaling into a winning position. He would add each time price retraces and appropriately moves his stop.
To place things in perspective, trading is like wooing that special someone you’ve been crushing on for a while. You’ve gotten to know when to be all chatty and excite them, and when to easily just keep your mouth shut and let the opposite person do the talking.
Very similar to trading, winning over your potential sweetheart requires you to be attentive and to have self-discipline and control.
Self-discipline again?! As you may have noticed, I’ve written about self-discipline and the formation of excellent habits more times than the Kardashians have handled their family issues.
But I need to say that I can’t stress the concept enough, especially when pressing trades can potentially up your risk.
Now should you’re recent to pressing trades, increasing your trading volume, or simply one among them adrenaline junkies who adds to trades for the joys of it, then I even have a three-step process that just might give you the results you want.
1. List down the foundations for pressing a trade
Before ever pressing a trade, it’s best to have a framework as to WHY/WHEN it will be helpful to accomplish that and HOW to do it safely. To start constructing that framework, ask yourself inquiries to determine those conditions:
- “Under what specific conditions should I scale in and add to a trade?”
- “When should I hold back?”
- “How would I adjust my entry levels and stops under different scenarios?”
One other method to allow you to construct your rules is to undergo your trading journal and find past situations where pressing your trade would have been trade decision.
Also, finding these market behaviors and studying them might be additional experience on top of your live/demo trading.
2. Make it a part of your each day routine
When you’ve listed down your rules for pressing a trade, you want to implement it in your trading.
An exercise to practice and switch your rules for pressing into habit is to visualise different trading scenarios before the market opens and write down the way you will react to them based in your rules.
By doing this, you is not going to only have rules ready specific for the day, but you’ll also minimize impulsive reactions and provides yourself a greater probability of reducing mistakes.
If you happen to follow this drill each time you trade, you’ll internalize the method and over time pressing your trades safely will turn out to be second nature. Learning rules might be kinda like learning take out the trash day by day.
Your spouse will “strongly encourage you” to take out the trash so often that you’re going to eventually accomplish that to avoid the nagging, errr, strong reminders. Any sort of good habit might be made automatic with each day practice… or a loving and strong-willed spouse.
3. Review your trading at the top of the day
How else will you recognize which rules for pressing a trade are costing you pips and which of them are working?
At the top of every day, record the market’s behavior and review your trading performance by identifying what you probably did well and what mistakes were made. You may then adjust and make it the main focus of your trading the next day.
Like several worthy goal, knowing one of the best situations on when to press a trade will take a number of practice.
But should you’re willing to commit to it day by day by making it a part of your routine, you’ll slowly have the opportunity to internalize this method into one among your good trading habits. This, in turn, will get you one step closer to really becoming a consistently profitable trader.
In search of your individual spot to record your market observations & trading statistics? If that’s the case, then try TRADEZELLA! It’s an easy-to-use
journaling tool that may result in precious performance & strategy insights! You may easily add your thoughts, charts & track your psychology with each trade. Click here to see if it’s best for you!
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