There’s an old adage which suggests that you’ll “only get out of something what you put into it”, and this can be applied to various aspects of our personal and professional lives.
It’s certainly relevant in the volatile and highly leveraged world of forex and financial market trading, where it’s possible to lose huge sums of capital if you’re ill-prepared and unable to cope with highly liquid and fluctuating asset classes.
Certainly, this mindset is key if you’re to maximise your trading profits, but what other steps can you take to achieve this objective over time?
- Trade Different Currency Pairs and Timeframes
While we’d always recommend starting out as a forex trader by investing in just one or two major currency pairings, before you look to scale your efforts organically over an extended period of time.
This shouldn’t prevent you from testing out a variety of currency pairs when using a demo account, however, as this simulated market environment provides the ideal opportunity to refine the detail of your investment strategy while becoming familiar with different major, minor and exotic currency pairs.
The key is to see which pairs tend to deliver the best results in terms of revenue, while also prioritising those that are the most liquid and capable of minimising your short-term risk as a trader.
We’d also recommend experimenting with different timeframes, particularly those that see different geographical trading sessions overlap and peaks levels of volatility.
- Gain Practical Experience
One of the main benefits of using a demo account is that it enables you to bridge the gap between theoretical knowledge and practical trading experience, which is key if you’re to successfully optimise your gains.
Once you’ve used a demo account for a period of between three and six months, you should focus on becoming more experienced in the field of forex trading and continuing to acquire valuable knowledge when investing with real money.
You should definitely take the time to continually learn and practice the art of forex trading, with a view to enhancing your daily performance and making incremental improvements that boost your earning potential accordingly.
- Keep Accurate Records and a Trading Journal
As part of your continuous learning experience, you could also commit to keeping a detailed trading journal. This will include details of every order you’ve ever executed, including its nature, the level of capital invested and the eventual profit or loss.
The main motivation for keeping such a journal is to learn directly from successes and failures, so that you can identify weaknesses, correct these and improve your trading results incrementally over time.
You may also be able to identify both positive and negative patterns in your behaviour, which may be highly informative in terms of how you operate going forward.
Just strive to be consistent when keeping your journal, and try to capture as much information as you can over time!