- Stop trying to make the market fit my strategy
This can be a disconcerting experience, but my number one lesson for 2014 is to remember not to try and make the market fit my strategy, and start to make my strategy fit the prevailing market conditions. For example, trying to implement a break out strategy when the market is in consolidation mode. You see the price break above your noted resistance level; you put on your trade only for price to turn back around causing you to lose money. A breakout strategy does not work in consolidating markets. Instead, you need to think about what the market is doing first, and if it is moving sideways consider something else, for example a range trading strategy. Having a repertoire of ways to trade the market rather than one favourite strategy that you try to use in all conditions is a more sophisticated (and hopefully successful) way to trade.
- Stay disciplined
- Join the community
Becoming more actively involved in trading blogs, communities twitter etc., is my final resolution of 2014. I tend to dip in and out of them rather than engage with any consistency. This means that I am potentially missing out on a wealth of information and trade ideas. Trading can be a solitary business, but the community can make you feel part of something and not so alone when your trade goes wrong or the going gets tough.
Kathleen Brooks is Research Director at FOREX.com. She has extensive knowledge of the financial markets after working as a trading analyst on the foreign exchange trading floor at BP's London office. While she was there, Kathleen covered foreign exchange, fixed income and equity markets and also co-managed a trading book for its analytics trading desk. [More about Kathleen Brooks]
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.
RECOMMENDED LESSONS
Making money in forex is easy if you know how the bankers trade!
Discover how to make money in forex is easy if you know how the bankers trade!
5 Forex News Events You Need To Know
In the fast moving world of currency markets, it is extremely important for new traders to know the list of important forex news...
Top 10 Chart Patterns Every Trader Should Know
Chart patterns are one of the most effective trading tools for a trader. They are pure price-action, and form on the basis of underlying buying and...
7 Ways to Avoid Forex Scams
The forex industry is recently seeing more and more scams. Here are 7 ways to avoid losing your money in such scams: Forex scams are becoming frequent. Michael Greenberg reports on luxurious expenses, including a submarine bought from the money taken from forex traders. Here’s another report of a forex fraud. So, how can we avoid falling in such forex scams?
What Are the 10 Fatal Mistakes Traders Make
Trading is exciting. Trading is hard. Trading is extremely hard. Some say that it takes more than 10,000 hours to master. Others believe that trading is the way to quick riches. They might be both wrong. What is important to know that no matter how experienced you are, mistakes will be part of the trading process.