How confidence leads to successful trading

Confidence is the answer to successful trading, it will help you master your trading strategy and enable you to conquer the world of FX trading!

The question we ask ourselves is how is this confidence achieved? The answer is not that simple as a number of intricate factors are involved in the confidence mechanism.  First, one must arm himself with knowledge of the FX markets, how they operate, what tools are required, how do platforms work and, the most important, when to trade? All of these can be learnt, either by self-educating yourself with the use of webinars, seminars, manuals and other educational tools available online everywhere, and a demo account can be opened with any FX broker and serve as a practice tool since it simulates the exact trading conditions as a real live account but without the risk of losing funds as they are virtual.

Losing trades can serve to build confidence in your trading strategy, simply analyze why you lost that trade, or why it failed and that loss will be ‘the best teacher’ you will ever have. You can also evaluate your daily trading journal to check what went wrong and this will eventually prevent the losses from happening again.

Winning a trade or two is a great confidence-booster, but it can also give you a false sentiment of confidence that you have mastered the art of FX trading! Imagine the ‘first-time lucky scenario’ where you place some trades and succeed with all of them? This may urge you to invest greater amounts of funds into your trading account and rush to over-trade, with a great possibility of losing all the funds. This situation can be dangerous, as it derived from pure luck, no thinking or skills were actually involved. In fact, this situation could be described as ‘false’ confidence, and this is exactly what needs to be avoided at all costs.

As opposed to ‘false’ confidence, your aim should be to obtain ‘real’ confidence. This will be achieved by developing a trading plan, not over-trading until you are armed with both knowledge and confidence, never risking more than you can afford to lose and using positive trading habits. The golden rule here is to never ever rely on ‘luck’; this can be as destructive as it can be joyous!!

Perseverance is another confidence- booster; ‘if at first you don’t succeed, try and try again!’ A successful trading strategy will only be developed over time, so patience is a key factor. Learn from the ‘silly trades’ which failed to learn why they failed and avoid them the next time round. In fact, these ‘mistakes’ are the ones that will greatly improve your trading strategy as they will serve as a lesson. Remember, no one was born how to trade in FX, it is a process which requires perseverance, determination, dedication, knowledge and a lot of patience!!!

So having now learnt that luck is to be avoided when developing our trading strategy, let’s enter this intriguing and fast pace world of FX trading by building an indestructible confidence, arm ourselves with powerful knowledge and begin positive and successful trading!