If you are considering becoming a day trader or you’ve just begun your journey as one, you would probably ask this question: what it takes to become a successful day trader. Whether it is the stock market or the forex market, learning how to trade wisely and to follow an effective trading routine with consistency and unrelenting discipline until it becomes a habit are the keys to trading success.
Successful traders in the market are usually committed to their trading routines. That is one of the most significant differences between an expert and an amateur. The experts have well-defined trading habits and patterns that allow them to earn profits constantly from their trading, while amateurs simply stumble from one bad trade to another, where their success is purely by chance.
The first healthy habit a day trader is supposed to have in their daily trading routine is doing chart analysis. Chart analysis can be described in such a manner where you are taking a “bird’s eye” perspective of the markets on your watch list. The best way to go is to start with the time frame of the weekly chart and give it a thorough examination. Search for critical market levels, major turning points, trends and regions of consolidation to pay attention to.
Usually, it is best to separate charting from trading. You should use charting platforms to analyze trades and only go to the broker’s trading platform (see indonesia best forex brokers) once you’re done with the analysis. The rationale behind this is because in the modern trading market where thousands of options are available, trading is done easily as a click on the mouse. Therefore, you could say that it is also easy to make impulsive decisions. Separating trading and charting adds friction, making it more difficult to follow your impulsive trade ideas and make unnecessary mistakes.
You will have to also understand that markets go through several stages, you will learn to know the markets as you study the markets that you’re most interested in. Hence, the next step in having a healthy daily trading routine is to make a trading plan. If you happen to see anything that piques your interest and you have done your analysis on it, strategize a trading plan to potentially lead this to a successful trade. Things you can include in your trading plan are such as market observations, relevant price levels, and also the reason you include them. Besides that, you can also include if-then possibilities in it, highlighting what can happen on a chart before you can trade.
Last but not least, remember to always update your trading plans accordingly. You should keep track of the latest news and trends of the market you’re trading in. This is because these things will negatively affect the outcome of your trading if you ignore them. Also remember to do your homework at least once a week on reviewing your past trades. This is important because you need to understand why your trade succeeded or failed and not to repeat your mistakes.