The stages of Forex trading
5 Key Stages of Trading
All Forex trading can be divided into 5 stages. Three of which will be intellectual and the rest will be reflexive. But let us proceed in order.
1. Searching for possibilities This stage is essentially elementary study of charts for several hours in order to determine which situation is most suitable for your type of working forex strategy. Naturally, this process is entirely intellectual.
Here, for example, you have always traded on breakouts and you enjoy doing so. So, you spend a lot of time searching for the appropriate breakout, but you cannot find it. And then suddenly a situation occurs that is very similar to one of the breakouts. It is true that the resemblance is distant, but something pushes you to make this deal. That is, at this moment the deal looks attractive enough, and you make it, although you understand that this is an unsuccessful deal in advance.
Before you make any deal, you need to decide on a course of opportunity-seeking and stick to it. But for you, at some point, you may find it boring and then you need to find an approach that will stimulate your interest.
2. The opening stage of a position This is a purely reflexive stage. This means that from the time you find a suitable market situation until you place your order, it should not take more than a few seconds. You can only open a position once the situation has been fully identified. What you need to remember is that if you are not sure of yourself and your correctness at the first stage, you will definitely have nothing to do at the second stage. Generally, traders who lose money lose their profits because they do not trust the work they have done themselves.
3. Position management For most players, this stage will be one of the most difficult, because at this stage the player's money is already in the work and the trader may panic a little. But any trader just need to learn to control their emotions, whether it be fear, greed or hope. When the trader becomes more successful, his emotions will gradually recede into the background, but for now the player must simply learn to ignore them.
4. The stage of closing the position This stage is a reflexive one. This means that in the transition from the third to the fourth stage the trader's brain is not preoccupied with such issues as profit or incurred losses. It just has to close the position and get out of the trade.
5. Fifth stage. This is analysis. If you do not keep a diary where you register all your trades, then it means you trade currencies just for the sake of trading. If you want to become a professional trader you should make it a rule to keep strict records of your trades. Any trader, beginner or experienced, should keep in mind that the most profitable trade only works once, but if it does work out, it will bring the player a decent profit.