After knowing the three previous simple ways to improve your trading performance, let’s continue our discussion about the next two simple ways for you successful trading.
Let’s check out simple ways to improve your trading performance:
Apply money management
Plan and implement money management by determining risk per trade, lot size and risk/reward ratio. The amount of risk per trade is measured by the value of money, not by pip. Additionally, the percentage of capital or balance in our trading account every time we open a position also determine the amount of risk per trade.
The most popular one applied is 2% of the balance. Then, you can determine the size of the lot per trade or position sizing. With position sizing, the amount of risk in the value of money will always be the same regardless of the amount of stop-loss (in pips) that you specify.
In order to obtain maximum results in the long run, you should determine the risk/reward ratio be greater than 1: 1. Usually between 1: 1 to 1: 2. However, you must be objective and realistic in accordance with current market conditions. Trading and money management strategies are the main components in a trading plan that must be carried out simultaneously. Money management will run well only if we master and believe in trading strategies that we use so as to produce consistent profits in the long run.
Keep a trading journal for evaluation
According to Baby Pips, keeping a trading journal is actually a crucial task in any performance or goal-oriented endeavor. Make sure you have worked according to the trading plan by keeping a trading journal as an evaluation tool. Without continuous and routine evaluation you will not know your performance in trading. Moreover, you need an evaluation to improve your trading performance.
You can follow the steps above with discipline and try for several months. If the results are not in line with expectations, or the development of your trading account is slow, try to improve your trading strategy with different trading signal criteria.
Read more: 5 Effective Steps to Avoid Fake Signals (1)
