- Acumen. What does it mean?
It is common to mention the importance of money management, trading purposes, psychology, and so on. But rare to deepen in such topics because we aren't aware of the others' personality, background. I hope it'll help you to understand a part of these better so I wrote you a two-piece article about intermediate trading psychology.
- Why is updating a must?
The trading mechanism is a compound process. Mainly it is centralized around trading strategies, and other method forward direct trading.
But passive trading is also exist. By checking the price action and interpreting why does it move as it do, or by counting your results, or even by asking yourself such question like, wow, what is going on? what was my plan? what is happening, should I do trade today, or just spectate the happenings?
Since our mind is not perfect, and we keep unlearning things in the long run, it is important to update our way of thinking, or strengthen it. This is also supported by the fact that the media, and the learning of new things, changes, replace, and distort our attitude.
The learning phase of our trading career, is not limited, musn't be limited, but you have to learn the procedure of learning. If you don't do so, probably you will feel yourself uncertain, by the mixed thoughts.
- Developing a language is similar to developing methods
I made you an illustration about learning languages.
When you start to learn new words, grammar rules and so on, you do it by reading it. By doing it, have you finished? No, you aren't you have to repeat it some times, and some time later you need to do it again,use it in living speech, forever since we keep forgetting.
When you start using it in live speech without hesitating you know that word/rule..
There are a lot of language, it is needless to be interested in all of them, but probably you find it better to get acquire one other one. In this case you need to separate it from the finished/used one.
It has advantage to learn not one but more "languages"
In the world of FOREX there are also a lot of method/strategy like languages. If you want to learn one, you need to read the basic thoughts some time, and develop what you learnt. Don't be satisfied by knowing everything medium. Try to understand clearly, by this you gain comfort, and easier to obey what you learnt, and repress bad traits.
After: You should use it, it makes you practiced. You can do it by analyzing every day, doing everything systematicly.
When you want to develop a method to the maximum of its, you have to concentrate on it, don't let your attention to be scattered!
And when you are on a high level of speaking a language or using a strategy, have you finished?
Updating your knowledge, and learning new methods, parts, modify your method is a must in order to increase your chances!
Next: Separate the two language, don't mix them. It can cause the damage of the knowledge what you have learnt by hard work, and developed for a long time.
Learn by reading as many, as you feel you know it well.
The Knowledge is not finite, but your time is so!
Do quality work, not quantity!
You will be more and more informed, and your chances will gradually increase.
- Very significant, but unconvenient topic to talk about is goals.
On money market it is not easy to generate money by trading. You have to pay some commissions, and even by being profession of a method nor you are able to make unimaginable interest on your investment without luck. But it is not problem, it should not be a purpose!
You can increase your profit by widening the leverage, by lasying your money management, or by using lasy rules as opening a position. It is not limited how many positions you do, still it is advisable to reduce the planned number of positions onto a rational number, AND fit your way of thinking to your possibilities.
Fit yourself to your strategy, and your strategy to you
It isn't a condition what kind of, or which method you should use, you can choose freely!
You need to survive on the market, not to make marvelous profits.
Lets think in percentage, not in amount of bucks!
It is not linear decreasing of your chances to survive on market if you use 2 times lasier money management!
Banks, and other safety investment types offer a few percentage interest for a year. Would it be wise to have the desire for 10% or more for each month?
All around the world each culture, nation have different salary.
Why should you head for getting the best salary of best nation, of best social layer?Lets fit your goals to rationality, and the possibilities up to your goals!
- Since on the internet and other information source there is no filter for useable information you need to select.
But you need to do that! It will not be made by itself. After reading an interesting stuff lets use your head, and check whether can it be used, or isn't it right?
Don't obey such advices blindly like determine how many trades will you do a day in order to be systematic.
Lets think about it. The market is keep changing, it cannot be averaged, it makes your money management and strategy worthless. Or such advices for money management like decide the amount of your stop loss by the amount of you capital... Does it have any sense at all?
Lets select, and keep developing!
Don't accept what is good to hear about and drop what is unconvenient!
Don't be ostrich who puts its head into the dust in order to miss the danger...
- Keep testing new methods, by demo account, keep documenting everything. Your mind is not a computer to remember everything.
The luck have big role in every walk of life but it is foolish to base on it!.
Would you think the first method you chose is the most suitable to you? If not, then lets test the desirable strategies what is close to your personality on demo accounts, (While you test you can trade live other method) and keep writing the results. Try different type of money managements, and so on.
Moreover the strategies work differently on other time frames, currency pairs, and for other people. And it is not the all. Since the market is changing all the time, you cannot sustain a full method like trading robots/programs can't eihter. The frame can remain the same, but the essence oboletes.
You haven't found the perfect strategy. Keep improving by systematic planning, there is no limit of learning!
- How to translate what you've learned into the everyday trading:
Its just one practical example, you can meet by everyday trading.
Lets suppose you are used to trade on USD/CHF, but you follow the happenings on EUR/USD since these two majors are strongly correlated to one other. You designated a period where the price action is supposed to the downside. (Pink rectangle)
(I attached some pictures, what show the worrying signs, and illustrate what I am talking about)
Whether you want or not, it effect on your thinking. You have got a bias. In order to obey the rules of your strategy, you need more sign to jump in, but since you are mostly devoted to USD/CHF it might demand a lot of time and energy to investigate further the EUR/USD, and as a second disadvantaged thing is it may confuse you, and decrease the clear picture on USD/CHF.
But the market doesn't take care about whether you have energy and ability to understand it or not.
If you jumped in, with a high probability would start to think it as the bad choose. Your attention would be grabbed, and you realised more and more worrying signs.
By the time passing, you would thining of closing this position. It would be harder and harder to make absolute rational decision. By doing so, you disobey your rules two times, and makes risk 1 time.
(It is not good idea to use so much indicator on the same picture, but these tools, and pictures serve for helping you understand the examle)
Don't forget, making right decisions don't mean profit, but that is acceptable. Disobeying two times, is untolerated!
Surviving on market! On the long run, the devoted time to it will be payed back!
(If you want a wider picture about this mind updating topic, lets check my first article.)
Best to you dear reader!