Successful day trading requires a high level of focus and skill. While there are many markets and various strategies, focusing on one market with fewer strategies can increase your chance of success. Narrowing down a market and becoming an expert in that market takes time and can be tedious because you are only doing the same thing repeatedly, but it is the best way to improve your trading.
Trading is a competitive business. As in any business, those with the most skill will succeed. Markets are active at different times of the day and have different price movement patterns. The news that affects them also differs. Because of this, it is challenging to trade in more than one market when day trading. Professional traders are no exception and make profits by focusing on the markets that they know the best.
How to improve your trading skills
Your results will improve as you focus on a few markets and strategies. In the beginning, we recommend that you concentrate on one market. Once you are consistently profitable in that market, you can expand to a second market, and you should focus on at least three markets at most.
For example, USDJPY is an attractive market to trade in Asian time, while GBPUSD is more active in European time. In terms of strategies, a contrarian strategy is best for markets with little volatility and quiet markets such as EURUSD. On the other hand, trend strategies are more suitable for active markets such as GBPUSD.
You will understand where you should focus by repeatedly studying and practicing different markets and strategies and then analyzing trade results. Although there are many different ways to trade, you need to find the right markets and strategies that suit you. It is difficult to make money by imitating successful traders because you have yet to optimize the trading strategy for yourself. Thus, to become a successful trader, it is essential to repeat the process of analysis and improvement steadily.
When you devote yourself to a single market, further deepening your understanding of what strategies work and what do not at any given time. This experience will help you change strategies when the market changes and minimize losses until you can build a trading strategy that adapts to new market conditions. Keep a trade log of all your trades to help you improve your skills.
What you should analyze:
- Identify dominant time frames
- Compare the profitability of each market
- Analyze trade results for each strategy
- Watch the market and record notes to help you understand the market
Becoming an expert takes time, but it will make your trades more profitable and less stressful in the long run. Also, experts know what to do every day to find profitable trades. Experts quietly wait for opportunities to profit from the market, and once the market changes, they can adapt their strategies and take profits where other traders experience significant losses.
To do this, take a long-term view and do not get caught up in short-term profits. In other words, the key is not the outcome of each trade but whether the trade is in compliance with your trading rules. You will join the ranks of successful traders by carefully repeating the abovementioned things.