Could the Pareto Principle work on studying forex too? If it does, which area in forex education do you think gave you the most impact in improving your trading skills? Was it mastering/learning more of technical analysis, fundamentals, risk management or maybe even trading psychology?
Another way of looking at my question is… If you had to pick JUST ONE area that you could invest most of your time learning, which would it be?
trading psychology
Here is a list of few things I would do:
I would reduce overtrading and making a journal with all setups I have made so I can read them to see where the problems were. Repeat same process until trading strategy is working at the end
Long term trading and leaving trade running until it hit my TP or SL
Be resilient to open a trade without confirming that trade have all criteria for entering
As one field/area it would be - trading management
Risk management. From my trading experience, risk management education is the best thing that I ever learnt as far as success in trading is concerned. Without proper risk management, you can not succeed as a trader. Even if you make a lot of profit from one trade and then you fail to use stop loss in the next, you might end up losing everything
Trading psychology is very important for the successsof a forex trader. This is because trading and emotions never combine. If you know how to control your emotions, then greed and impatience will not make you take dangerous deciision
It really depends on the person and their psycological makeup. I would imagine that individuals’ strengths vary across the board. They could be good at emotional control or pattern recognition or risk management or at being patient, Any one of these characteristics is a great strength to have and they are areas that all traders usually have to continually develop.
Given your question, answering in the most general manner, the following 3 items have served me well, though I am far from an experienced trader.
Trade small lots, fully understand every aspect of risk management, be patient, trading longer term off the daily chart only.
There are so many other aspects of trading to learn but if you are looking for the 20% I would have to say, generally speaking, these would be in that range.
Good luck,
KC
Could you expound on this one a bit more? Do you mean don’t open trades without needing to confirm that it satisfies your trade setup requirements?
How did you get started with learning about risk management?
I guess that’s a good combo of risk management and trading psychology!
I’m surprised not many people wrote technical or fundamental analysis. The core of trading looks like it really boils down to how you conduct yourself. 