8 Quick Reminders Before Making Your 2014 Trading Goals

Ready for another year of making pips? Not so fast! For both forex newbies and pros out there, here are a few things you should remember before you make new trading goals for the 2014.

For the newbies:

1. Forex trading is NOT an avenue for making quick money. Hate to burst your bubble so early in the game but this is something that you have to learn right off the bat. Sure, it’s possible to make fast money, but odds are probably 99.99999% that you ARE NOT in the less than 1% camp of naturally born, financial wizards who can sustain a 100% gain a year for an entire career, let alone even for more than one year.

Fact is, forex trading is more like a business, and its a long, grinding business of highs and lows. You put up capital, you make and lose money while you improve your skills, and you SLOWLY learn to be consistently profitable.

2. Only trade money you can afford to lose. One of the most common newbie mistakes is risking money they can’t afford to lose. You need to take out the fear of losing money so you can focus on your trading skills. If you don’t have enough capital yet, you can start with small accounts or try trading on demo.

3. You will be a very, very bad trader in the beginning, and that won’t change until you keep a trading journal. Because you’re new, you’ll likely make a lot of trading mistakes that takes experience to overcome. Even a simple, well-kept trading journal could speed up the improvement process by showing you what’s working and what isn’t, and if you’re making the right changes. What’s not measured cannot be managed.

4. Don’t hesitate to ask for help. No trader is an island. All pro traders were once newbies. Get in touch with other forex junkies in the forums or hit up the FX-Men via their Twitter and Facebook accounts if you have any questions.

For the pros:

1. New is not always better. Before you explore new strategies this year, take a second look at your old ones and check if a simple adjustment in stop losses, position sizing, or indicator settings would have changed the outcome of your trades. Unlike Barney Stinson, I don’t believe that “new is always better.” Also, check your journal to see if you consistently executed your strategy–even the best strategies can’t be made profitable with poor execution.

2. Set realistic expectations. Just because you caught a 200:1 reward-to-risk trade last year does not mean that you should aim for a 1,000% gain in your account this year. Set your goals and expectations based on your average performance, available time for trading, and capital limitations.

3. Winning can be as dangerous to your account as losing. Psychologically similar to how losing streaks can make you fearful of taking trades, winners can also cause psychological damage by making you overconfident. This can lead to lack of preparation and overtrading, which is worse that being too fearful because you are most likely taking on unnecessary risk. No matter how big your wins are, remember to be consistent with the final point:

4. Focus on the process, not the profits. All the points above can be summarized into this one. Forex trading is a marathon, not a sprint. Like any worthy endeavor, becoming consistently profitable requires consistent practice and self-development–don’t kid yourself if you think it requires anything less than that. Don’t be distracted by one-time profits and losses. Keep your eyes on the prize, and stay focused on doing the right things, the right way, at the right time.

How about you? What other trading reminders would you like to share to other trading junkies out there?  Please leave a comment below!

Have a great trading year, everyone!

  • imezi

    Thanks guys! Nice tips …

  • http://forexlis.ru/ Raiterov

    New year, new goals
    Good Luck Guys!!!

  • srhn

    Hi,
    I have just finished reading of “Trading in Zone” by Mark Douglas, do you affair any other helpful psychological books?

  • Richok

    That’s great. It can’t be overstressed. But I have been needing help verifying a few brokers – fxpro, admiral markets, markets.com, alpari, fxcm, hotforex, profiforex?
    I am a newbie. I have been trading these MT4 platforms, and sometimes I just get the feeling I was being played! When am winning, my values are stalled relative to my pips gain. But when am losing, the values run up the scale.
    I also noticed that a lot of them vary my entry price by as much as 30 pips from the chart reading! So, I spend most of the trades recouping instead of gaining.
    This seeming lack of transparency is being meted to me even as a demo-trader. What will happen when I go live?
    I am a scalper because I do not have great amount to start with. Please, what brokers have unbiased integrity and honesty and allows small accounts of around $300 to scalp up pips for growth, and won’t mind?

  • New baby

    Thank you for your great advice.

  • Abul Kalam

    I sincerely thank you and like to know what we can do from non developed financial countries who feel Forex is luckrative but not co operative with our banking systems ?

  • http://affordableautoinsurancewyoming.com Vivek Khanduri

    Nice tips. I am starting trading.

  • Mandy

    Thanks . Good advice.
    I am newbie and struggling to have a standard routing and strategy to trade. FX is indeed difficult to understand and and more difficult is doing trading.
    I am presently more focus on the findamentlas rather than technical but I think mix of both is required.
    Any tips on the setting the price levels for few currenc pairs is welcomed.

    thanks

    • joy

      Hi mandy, i would like to help you out. if you want we can chat about forex, two fools know more than one hahaha.

      • marxine

        Hi Joy, am max from Kenya… have been trying to learn how to trade, actually i have funded my live account after practicing with a demo one for three months… this thing is hard….i made profits initially but all over sudden i sunk into heavy losses…. i mainly traded with news… may be we can assist each other and many other guys who are interested but one thing am sure of, with patience, practice and the desire to learn we can take our lives to next unimaginable level. lets share tips. thanx so much..