Many traders who are not disciplined end up losing money because of minor mistakes. Failure to follow specific structures and strategies will lead you astray, and losing out on trades will be part of you.
Just by saying be disciplined or have self-control will not put a forex trader in the correct path. That is why there is a decision plan that you should follow effectively to achieve immense success in your trading journey.
A perfect trade will require specific essential components. It must have a favourable risk to reward. You should understand that as a funded trader, your job is not to locate the ideal point of entry. Your task is to forecast the prices at which trades will enter and exit, having a beneficial financial outcome.
Therefore, to accomplish this and many more helpful hacks, you need to learn the decision-making process and focus on it to acquire more profits. The decision is shortened to PREP to assist you to memorise what it entails.
In this part of the plan, what you should focus on is the end. You need to determine at what point you will be getting out of the trade. It seems like working your way to the front from the back. This technique gives you an advantage in that you are aware of the contextual value.
It also enables you to concentrate more on your primary objective as a forex trader. Avoid focusing too much energy on the entry of a trade as it is not that advisable even though many people still do it.
Another thing with starting from the back is that you focus more on what is to come rather than what is happening now.
This is the point where you evaluate the current value of the asset you are trading concerning the profit that it could bring. You then have to split it into two and deduct it from the point of entry. This should be far away from the forecasted path of price.
In this step, what you are assessing is the point where your stop will be hardest. You should know that the more time spent away from productive reward to peril scenario, the more you are increasing chances of hurting yourself afterward. The general rule is that if there is no fruitful reward to risk then no trade should be made.
Many situations may occur in a trade that may force you to edge out. Price creates technical points that were not there once you have opened a trade. Some of these technical points come to work against your projected path.
Sometimes your trade will not work because of the technical points created by price. You will encounter obstacles as you mark up your chart, and these obstacles must be broken for the trade to end successfully. Just know as a trader when to exit trades and when to stick to your original drawing map based on emerging information.
This point means that you should have faith in your actions. Do not doubt them as you are visualising potential future scenarios. You need to understand that it is on infrequent occasions that a trade will work according to your plans immediately.
The main goal as a funded trader is to remain patient as you look for possible future opportunities for bagging the bucks.