Nick Goold
Any trader can make short-term profits if they have been trading forex for a certain time. However, the difference between successful and losing traders is whether they make long-term profits. If your performance graph is stable and steadily increasing, you will enjoy trading and have confidence in your trading skills.
It is important to note that if winning trades continue, you will feel excited and might be unable to make calm decisions. Getting too excited may lead you to make impulsive trades that do not follow your trading strategy.
Many people become overconfident in their skills when making profits. They need to consider the risks in increasing their position size and avoid taking impulsive trades.
Three steps to more consistent forex trading profits
Step 1. Focus on following the process, not the outcome
If you have a profitable strategy, it can sometimes be tedious, leading to the temptation of trying new trading strategies. However, using one method will still be better than repeatedly changing your trading plan. In addition, changing your trading system following a short-term losing streak is usually a bad idea.
When experiencing a losing streak, consider reducing the size of your positions rather than changing your strategy. Focus on the process of the trade, not just the result. Examine how you would act next time in similar market conditions and whether there are areas for improvement to optimize your process.
Step 2. Take a break when you can no longer follow your trading rules
A temporary winning streak may increase your account balance quickly. However, a consistently profitable trader will focus on following their trading process rather than short-term results.
If successful traders make profits by breaking their trading rules, they can recognize that their gains were just luck and will need to refocus on their trading process. If you win without following the trade rules, you are just lucky. If you want to trade on impulse, turn off your computer and take a break.
Step 3. Remember the hard times when you made big money
Self-confidence is essential for traders. You must make quick judgments and decisions in numerous situations with confidence. However, you can make poor trades when overconfident. One way to avoid overconfidence is to reflect on past periods of difficulty.
When on a winning streak, be cautious and examine your bad trading habits and analyze the market. Focusing on your trading process rather than short-term results will lead to more consistent profits.
