12 Questions to Answer Before Your Next Trade

[Samirofi]

if you have been trading forex for a long time, take a moment’s rest to think about how you could improve and ask yourself these 12 questions.

If you’re new to the markets, try answering the questions before you begin on your journey:


1. Do you have the time required to trade?
How busy is your diary and how many commitments do you have? If you have too many you should think twice about trading because successful trading will take up a lot of your time.


2. What returns are you hoping for?
Have you even thought about this? Knowing what returns to go for is crucial in order to build a consistent trading strategy.


3. What stops you from becoming reckless?
Make sure to know your emotional triggers so that you can react when the bad times hit.


4. Can you describe your methodology?
If you can’t describe your trading methodology in a few short sentences, it’s probably too complicated or doesn’t make much sense.


5. How do you deal with unexpected events?
Long tail and black swan events happen and you should probably have a plan of action for when they hit.


6. Do you use diversification?
Diversification can be an effective way of reducing risk without destroying overall returns so you should at least investigate it.


7. What are the strengths and weaknesses of your strategy?
No strategy is perfect – if it was it would be able to make unlimited returns. Try and understand your strategy better so you can improve it over time.


8. What are your own strengths and weaknesses?
Just as no strategy is perfect, neither are you. The better you can get to know yourself the better trader you’ll be. For one thing you’ll be better at handling the emotional side of trading. And for another, you’ll be better able to design a strategy that suits your personality.


9. Have you tried different entries and exits?
Some traders use the same rules for opening a trade as exiting a trade. But does this make sense? Wouldn’t it be better to test different rules for both buying and selling?


10. Do you understand your leverage amount?
In forex, a great deal can be gained from trading the right level of leverage. Too much leverage can cause too much risk and too little leverage can lead to small returns. You should try testing different amounts.


11. How many strategies do you trade?
There is nothing wrong with trading one strategy; in fact it can be preferable for many traders. However, including more than one strategy might be a good way to improve your overall profits.


12. What percentage drawdown can you stomach?
All forex traders should know by now not to trade with money they can’t afford to lose. They should also realise their maximum drawdown comfort level. If you choose a strategy that makes big returns, albeit with bigger drawdowns, you might not be able to stick to it.

[raheelrehman]

I make proper plan before I start trading, I see the market first, then I decide which strategy will work in that condition, how much market may move, and what are the support and resistance points and how near the market from support or resistance, if it is on support or resistance then I simply apply buy on support and sell on resistance, if there is a pattern formed in bigger time frame then I trade on long term according to market, if there is an economical event near then I see the possibilities of market movement. All the points you have mentioned above are good to implement for a trader who is willing to survive longer in this market.

[sichone]

Trading forex is my daily activity since some years ago. This because I am sure that forex trading will a good alternative for our life style in the future, and more than that forex trading will be even the best option for many people. I learn and take part in forex trading because there I can learn how to manage my capital for forex trading, certainly based on the best planning and strategy. And also reading all sharing about the psychology of trading forex and I am sure they will help me to improve my habit in trading forex.

[universalfx]

I also do love forex business since when i got information about theis business first time. Forex business is really worthy to make lots of profit from the forex market using good trading knowledge and experience with good amount of capital balance. Doing this business is really eassy but holding the profit and maintaining equity is really hard to do. That's why a trader need to keep practice regularly to gain good trading experience and knowledge and learn various strategies.

[yoyo11]

yes if I also had quite a long time know this forex business but are still experiencing lose only and there is no solution to get to the advantage because I only se people who love emotion and probably is not suitable in this forex but I always clean hard to make a trade become even much spending money with useless

[sichone]

I my self appreciate with the person who begin this thread by asking some question as the guidance for traders to do in his daily trading activity. I agree very much with all items above to the the traders, and use them and give your private answer to the question before beginning your new day trading. I am sure you will reach your financial freedom by forex online trading

[AVX35]

Good guideline. I would add: are you prepared for losing? and, do you understand your strategy?. I think that all questions are basic to be answered for each trader before entering into market.

[cochy17]

1. Do you have the time required to trade?
How busy is your diary and how many commitments do you have? If you have too many you should think twice about trading because successful trading will take up a lot of your time.

yes as good trading plan those had with the details on customs as trader to enter within the given range of times on managing works on completing the numbers of target to closes with the good helps as trader to occupy the best on choice with the selection of the good trading system on referring signals to work on opening the new position with the market.

[danangihsanudin]

so many to be had in forex especially a knowledge about trading forex so i must learn more about this , cause in my future i want be a sucses trader .

[Noin1976]

i like to investigate the market that how it is progressing and what is the exact time to enter in the market. If you have knowledge and skills then you can succeed in Forex and can make good money.