This article considers if you have flaws in your FX trading system and how you can overcome it.
If you have entered the FX trading market, chances are you have done so to make a profit. The problem is that most people do not make a profit and they are unable to determine why. There are certain common points where your currency trading system may be flawed. It is important that you know what these points are and how you can overcome these trading flaws.
Assess Your FX Trading Strategy
When you start to look for flaws in your currency trading system you should consider your trading strategy first. If you do not have a trading strategy then that is the fatal flaw in your trading. All traders must have a strategy that they follow and trade with consistently. Only through consistently trading with your strategy will you be able to realise profits on the market.
Of course, if you do have a trading strategy you should consider how it fits your personality. Your personality and trading strategy should work together to help you achieve your trading goals. If your strategy goes against your personality then you are unlikely to trade very well.
If your personality and strategy match you should consider all the parts of the strategy. You also have to consider whether or not you tested the strategy. It is important that all forex strategy is tested on a demo account before you start trading live with them. This allows you to adjust anything that does not work and find any weaknesses in the strategy.
Consistency is Important
While most traders will notice trading inconsistency when they look at their strategy, others may not. It is important that you review all your trades to see if inconsistency is the flaw in your trading. Inconsistency can be anything from not trading according to your strategy to trading outside your scheduled hours.
To overcome this problem you have to identify where the inconsistency lies. Do you have a problem with your strategy or are you simply trading at the wrong times? If there is a problem with the strategy you should fix this and retest the strategy. If you are trading at the wrong times you have to work at being more disciplined. You cannot be successful on the forex market if you are not disciplined.
Assess your Goals
Something that many traders do not consider is that their trading goals are their flaw. Most people will set a monetary goal for their trading. This generally takes the form of making a certain amount of money in a set amount of time or doubling the initial capital. While this is a good target you cannot guarantee profits on the market. When you have a monetary target if you are not reaching it then you could start taking greater risks and deviating from your trading strategy.
To overcome this you have to reconsider your trading goals. If you have monetary goals then you should change them into process drive goals. Process drive goals look at having consistent trading. Most traders find that when you are consistent you are able to make a profit because you can replicate the profitable trades.
You should review your trading system on a regular basis. This will give you the opportunity to see where you are going wrong and fix it.