Here are a few more things that I wish I knew when I first started out.

If you have not read the first part of the article, I suggest you do so here.

Simplify... but not so much that your strategy does not work

I'm sure you have heard it's best to keep things simple when you trade. There's a lot of wisdom in that saying, but it's not as simple (pun intended) as it seems on the surface.

A successful trading plan may well be summarisable on a napkin, but there are some skills you need to acquire as a trader that might be difficult for a beginner. Namely:

  • Using multiple exits

  • Position sizing

Often it is only precise execution of these more complex skills that turns your losing trading plan into a winning one, and if you neglect to learn these skills because you are a beginner it is highly likely you will fail.

So instead of hiding behind the mantle of simplicity, realise that your role as a new trader is to acquire the skills you need to be successful.

I can guarantee that if you take the time to become an expert in position sizing and using multiple exits, then it will do wonders for your future as a trader.

just for the financial loss, but also because of the very real psychological scars. Please take care.

Get very clear on what you are trying to achieve

50% of the system development process should be thinking about your objectives and what you want to achieve by trading.

Too often people open an account and place trades on a whim, not understanding:

  1. What they want from that trade

  2. What their trading plan is trying to achieve

And saying "you want to make profit" is not good enough.

Your objectives form your roadmap, and everything else flows around them.

What should your objectives be? Only you know. Take some time out to think about what it is you are trying to do, and how you would like to trade.

You want to consider your lifestyle, commitments, and what resonates about trading to you. Say you always thought of yourself as a day trader, or perhaps you have read about a trading style that you might like to try.

These objectives will evolve while you grow as a trader, so don't feel as if you have to set them in stone. What matters most is that you have a strong foundation of objectives as your starting point.

(There are lessons on this in the Advanced Forex Course for Smart Traders)

Know your market types

Regular readers are probably sick of me banging on about it, but for those of you that are new to trading, one of the things that helped me most was determining the market type and then applying the correct strategy to that market type.

This, perhaps more than anything, changed the way I trade. I wish I had known how and why to do this from day one.

I have wasted countless hours searching for the Holy Grail trading strategy - a system that performs excellently in multiple, if not all market types. It doesn't exist.

Instead, I build and fine-tune separate systems for separate market types, and it has transformed the way I trade.

It will hopefully change the way you trade from the get go.

Love the journey

Trading is a wonderful journey of self-discovery.

The beauty of the markets is that to become successful, not only will you grow as a trader, but you will also flourish as a person.

I am blessed to be able to live and work full-time in the markets, and it is my hope that the journey will be as transformational for you as it has been for me in all aspects of my life.

I wish you the very best, and if you have anything on your mind please feel free to share it.

Cheers,

Sam

About the Author

Sam Eder is a currency trader and author of the Definitive Guide to Developing a Winning Forex Trading System and the Advanced Forex Course for Smart Traders (get free access)