Enhance your trading performance in FOREX Markets!

Improvement of trading performance in forex binary options is a continuous exercise in commitment.

The question is: have your trading skills improved, or have you remained static? This article will present some key performance parameters that can help you evaluate your trading performance.

For all those traders who are struggling to make money in the markets each month and are looking for some no-nonsense ideas to get on the path towards profitable forex trading, this one’s for you!

Starting right now you are to begin viewing your interactions with the forex market in terms of costs (losing trades) and revenue (winning trades). The aim of any business is to keep costs as low as possible and revenue as high as possible. In forex trading this is done by effectively managing the risk to reward on every trade you take.

Key Performance Metrics

a) Win/Loss Ratio: A win/loss ratio comes to play if the trader’s risk-reward ratio is 1:1, in which case the number of pips sought as profit is equivalent to the number of pips risked. It also comes to play when the trader sticks to acceptable risk exposure levels for all trades.

b) Adjusted Win/Loss Ratio: It produces a more realistic performance result than the original win/loss ratio, because the skewing effects of one huge gain or one huge loss have been eliminated from the calculation.

c) Distance from Break Even: The more profits made in a trade, the lesser number of trades required to hit break-even point. This is why traders are always advised to seek trade opportunities that have far greater rewards than risk.

d) Win/Loss Duration: A lot about the trade duration profile will reflect the trader’s psychology. Set-and-forget traders tend to be the more assured types of traders, while the frantic guys tend to keep an eye on the charts all day long and tend to run off with lesser profits than they should be taking home

e) Trading Sequence Patterns: There is always a tendency to complacency when the trader is on the end of a winning streak. Winning streaks occur as a result of bring correct in trade calls and knowing how to apply the psyche to trades.

Strategy Scorecard

The next step in performance evaluation is to assess your results on a forward-looking, real-time basis. This means planning and putting on trades with a strategy in mind. The probability of improving performance is related to your skills and not the market. Each performance challenge tests a core forex trading skill.

No one single strategy applies to all traders. Each trader applies their own personality to the trading and only after many trades can a real trading plan emerge. That is why in the next paragraph, we have designed a series of trade challenges that will help a trader evaluate how they would approach different scenarios in the marketplace. A trader can do one challenge over one week or take more time. This challenge will require a good amount in trading capital so that trades can be placed at a frequency which gives the trader sufficient exposure to changing market conditions.

Affirmations as they relate to successful forex trading might include things like:

• “Remember to manage my risk on every trade”
• “Forex trading is a business not a trip to the casino, treat it as such”
• “Be Patient, you don’t have to trade today, the market will still be here tomorrow”
• “Don’t fight the trend”
• “Take profits when they are 2 times my risk or slightly greater, don’t hold out of greed”