Out of 5 trades, 4 ended up as scratch trades (very small losses or very small wins, averaging each other out) but the one GBP/JPY trade fell right into my take profit and saved my week.
Last week showed three very important things that a trader has to master in order to trade successfully:
1. Know when a trade is not working out
This is such a big thing that I can’t stress this enough. You have to really understand when your trade isn’t working out and you have to know the signs that signal a weak setup.
In our pro area, I talk a lot about cutting trades that don’t work out – and we have different videos on how to manage a trade and minimize losses.
After my entry, there was an intense battle between the buyers and the sellers about the next move. This happened right at a key support area and you can often see such phases after a breakout.
Keep losses small and your winners will take care of themselves.
Eventually, the price fell into the take profit we set and the trade was closed for a profit.
You can see, although this is not a huge winner, it can easily make up for several previous losses – especially if you know how to effectively manage losses.
With our students, I spend a lot of time working on improving their trade management because I see it time and again how important this skill is. One good winning trade will often be enough to help traders end the week in positive if they have managed their other trades well.
It is a skill that is often overlooked.
2. Have a plan
Every Sunday I upload a 30minute video in our pro forum where I share my watchlist with the best setups for the week. For me, it takes me roughly 3-5 hours, depending on the number of setups and the volatility of the past week to scan all markets (all Forex pairs, Futures and commodities) and create trading plans.
I would NEVER even think about starting my trading week without having done my watchlist and shared it with our students to help them prepare. You can greatly reduce the screen-time needed during the week if you have done a good weekend watchlist. And you are also less likely to miss trades.
Of course, the GBPJPY was also outlined in my video watchlist and I knew exactly what I was looking for and what had to happen before I’d enter a trade. The rest is then only waiting.
3. Don’t worry about winrate
When I talk to new traders or meet other trades, the question about my winrate always comes up early. For me, this is a clear sign that the trader isn’t ready yet to trade well, let alone profitable. First, it doesn’t matter if your system has a winrate of 20%, 50% or 90% – even the best system with a winrate of 95% can be a losing one.
Instead of obsessing about winrate, start looking at the combination of winrate and Reward:Risk ratio.
And with that, I wish you a great trading week and hope my short little braindump provides a few ideas how you can view trading in a different light.
Questions? Just leave a comment below – we read every single comment.
Want to know more about my trading system? Check it out here: Our Pro Forex Area