"The proper execution of your trades is one of the most fundamental components of becoming a successful trader and probably the most difficult to learn. Most traders find it is much easier to identify something in the market that represents an opportunity, than it is to act upon it."
The key variables to achieving trading success in forex are the forex trading strategy with edge and a positive expectation combined with the ability to consistently execute that forex strategy.
Due to the fact that professional traders have mastered their forex trading strategy, they trade less frequently than forex beginners because the pros are looking for a very specific event to occur in the market, rather than throwing darts in the dark. So, it almost goes without saying that once you finesse your trading edge, start trading without your pre-defined edge is out of the question.The consistent execution is the most important element. Of course, here we assume that a trader has and developing its forex strategy based on reasonable theories and assumptions. Given that, the consistency of execution becomes the key focus.
Many traders do not have this ingredient in place and this is the primary cause of their lack of trading success and also the emotional challenges that they have experienced.
Of the traders who have a positive expectancy system there are some who find the consistent execution challenging, particularly in specific situations such as during a period of drawdown or after a string of successful trades.
What seems to distract traders is excessive focus on Profit & Losses and the outcome and results of the trade. That is the trader is so distracted by feelings about the outcome and money to be made/lost that they do not focus enough on the key components of executing their trade to achieve the best outcome.
Likewise traders who are low in confidence fail to execute their trades and fail to take opportunities when they occur losing potential earnings.
The psychological trick is to focus on the flawless execution of the forex strategy as opposed to overly focusing on P&L and results.
The following five components are the core of your strategy which must be followed unemotionally and flawless
1. Monitor – watching the markets
2. Spot – spotting a trading opportunity
3. Enter – enter the market, place the trade
4. Manage – management of the position
5. Exit - exit the market, close the trade
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