Trade little and often to make time to rest your mind.
High frequency trading means to trade wisely, not often.
The idea that high frequency trading requires staring at ten screens for ten hours per day is very wrong. Not only is this unhealthy when it comes to making trading sustainable for your mind, it will also yield poor trading results.
If you trade small sums often, you will find yourself being more productive and building a profitable performance. Trading wisely and making the correct decisions does not take a huge amount of time. When trading, you cannot control the market, but you can effectively control your own account.
Take time away from the charts
It can be difficult to progress after a winning trade. When you win, it is instinctual to immediately try to replicate your success. On the flip side, when we lose, we try to chase that lost capital as quickly as possible.
Win or lose, always shut off your computer after a trade and take time to reflect. This a crucial time in which you can build on your trading stamina and become a powerful and logical trader. Resting the mind will only help your knowledge and skills grow.
Not every session will be profitable, so always take time to work on your mind. If you feel stressed out, return to the charts later. Revise and optimise your Forex trading strategies in your time away from the market.
Develop a high frequency trading routine
As previously mentioned, most traders should consider reducing their time in front of screens. In the beginning of your trading journey, you may want to study and back test a lot. Creating a three to four hour daily routine is more than enough time to prepare your trades and keep a handle on your trading account with maximum growth.
When to close profits and losses
The simple answer to closing positions is, ultimately, when your bias changes. In most cases, you want to leave your trades to run, but there will be times when it is best to close out trades early, both when they are making profits and losses. You need to read and focus on the daily candlesticks to identify shifts, and then capitalise where you can. You must follow your risk management rules strictly in order to maximize profits.
Reacting to trading outcomes
When our Forex trading plans fail us, it is normal to experience disappointment and sadness as an initial reaction. Yet, when we start doubting our abilities to succeed in trading, when we start blaming ourselves for factors we cannot control, it is essential to recognise that emotions are playing too big a role in our trading.
Reducing risk and accepting that we will lose at least 20 to 50% of our trades is a part of the mindset of a trader, combined with the positive risks of a reward. A trader must focus on the bigger picture and not get caught up in the details of one bad trade. With a lower trading volume, a possible loss has a larger, more stressful impact, a statistic that works in favour of high frequency traders.
Trust the process and build an emotional structure that can withstand both winning trades and losing trades.
Simple yet difficult
High frequency trading is a simple process on paper, we either buy or sell. Placing a trade and hitting profit can also sometimes be easy. At the same time, enduring losing streaks can lead to depression. This can also lead to the so-called ‘anchoring bias,’ the tendency to define future trades by historical trends.
Some Forex traders tend to ignore the fact that the market conditions continuously shift and spend their time regretting past losing trades. The simple solution to this conundrum is to cover each trade with a low-risk stop loss.
High frequency trading overview
In conclusion, Forex trading is much more than financial knowledge or pure luck. Forex trading is a super complex field, with emotional intellect being a major player. Forex trading and Forex psychology are two parts of the game. Emotional awareness and control in high frequency trading is widely underestimated and should be seriously considered by all Forex traders.