5 Steps to Prepare for Trading Forex in 2019

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2018 is fast approaching its end and with that comes the beginning of a new trading year.

Preparing for the new year is an important process. Setting yourself up to start the year on a strong foot is going to have a ripple effect on your trading.

I want to give some insight into how I prepare because if you prepare well it can have a big, positive impact on your trading.

It starts by taking advantage of December and January. These are generally quieter trading months so we want to use this time in the best possible way.

So, read on to see the 5 steps I will be taking in order to prepare for trading in 2019!

1. Take a Break

This is the first on my list because, quite frankly, it is the most important.

Trader burnout is no joke – most traders that quit do so because they burn themselves out and lose their drive. Trading is a difficult career to maintain because you need to be consistent – it is important you acknowledge that fact.

So take a break from trading for a bit.

December is quieter, there are less opportunities to take trades. This is time where you can reset and move away from the charts without FOMO (fear of missing out).

Approaching your trading with a fresh set of eyes cannot go understated. You will pick up on different things, think about problems differently, and generally have a more revitalized mindset.

Taking a break will also help your trading psychology. You may be surprised at what negative psychological tendencies you have been experiencing after you take a step back from your trading.

This is a case where not trading can actually improve your trading!

2. Assess your Strengths & Weaknesses

You have just completed a full year of trading so there can be quite a lot to unpack from your results. Don’t let that discourage you though – your trading journal is going to help you through this step.

It’s also why I strongly encourage traders to use a trading journal (feel free to use mine here). It pays off massively at the end of the year when you can look back on your data.

By collecting your trading data you can more easily identify areas where you are strong and areas where you are weak.

Perhaps you have a bias for long trades.

Maybe your win rate with continuation trades is over 70% whereas your reversal trades are lower than 40%.

I’m sure you don’t need me to tell you why that is valuable information.

Targeting your strengths and working on your weaknesses is going to make you a more profitable trader which would be a welcome improvement!

Use that as motivation to look at your results this past year. Take the time to check out your data from a bird’s eye view – you might be surprised to find out what you are good at.

3. Organize

This is more of a general organization of your trading in order to ease yourself back into your routine.

Look, it can be stressful to come back to trading after a long break. Make it easier on yourself by organizing what needs to be organized.

I’ve put a list below of what I organize and aim to finish before I start trading again. The transition into the new year is important and I like to make it as smooth as possible.

  • Setting up your trading journal for 2019
  • Look at finances in my trading accounts
  • Start preparing tax related items
  • Update any subscriptions (e.g. TradingView)
  • Look over my Trading Plan and update if needed

These are tasks that aren’t the most interesting but will make your future trading life easier.

I like to put as much focus into my trading as possible. Part of my process over the last 15 years is that I know I perform better when I have the mundane tasks organized.

This lets me put my entire focus into my trading so I perform better!

The more I can focus on the charts, the more profitability I achieve. The same could be said for you!

4. Set Some Goals

One of the simplest and yet most effective of my preparation steps is setting goals.

Whenever I meet a new student I always ask what they want to achieve with their trading. The answers vary but largely it is to achieve financial freedom and independence.

But when you have been trading for a year, or two, or five, your goals will shift and adapt. Some of your goals will have been achieved, leaving a gap that can be detrimental if you don’t fill it with a new goal.

At the beginning of every year I seriously consider what my goals are for the next trading year. This gives you something to work toward, something to achieve.

Trading can be lonely and hard to find consistent motivation. You rely on yourself in trading more than most career paths.

So you need to give yourself a direction.

It should also be something you can realistically achieve with your Forex trading in 2019.

Setting unreachable goals can have a big negative impact on your trading psychology. So start small and end big.

One of my small goals that I hope to achieve within 6 months is to include more lower time frame trades into my trading.

By looking at my 2018 trading journal, I found that my profitability with lower time frame trades improved immensely from my 2016 and 2017 results. As a result, I am looking to make a small adjustment to accommodate for that success.

Use the tools at your disposal to set some goals. They can be small or they can be big. What matters is that they motivate you.

5. Backtest

Not everyone wants to take a break for the entire duration of the holidays, so if you are looking to be a bit more active, this step is for you.

Backtesting can be an incredibly useful way to hone your trading skills. At times like December when price movement can be slow, backtesting really comes in handy.

There are different options available to you – Forex Tester 3 is probably the most popular choice. It’s currently on sale until December 26, 2018, so go check it out (this is an affiliate link – all the profits I make go to charity).

If you have a TradingView account, you can actually use the replay feature to backtest which is really handy. You can start a free trial for one month with TradingView so if you want to try it out, head on over to the site here.

Backtesting will enable you to practice your analysis of price action as well as your practical trading skills. Setting your support and resistance, particularly on lower time frames, is going to pay off with backtesting.

Your stop loss, take profit, and entry placement is a great focus for backtesting as well. You can immediately see how your assessment holds up.

Similar to step number 2, backtesting is going to help you identify some of your strengths and weaknesses.

Maneuvering around these will make you a more profitable trader!

That’s It!

That sums up my preparation for trading Forex in 2019!

The steps I have outlined are simple but effective. That is a trend I have come to find the most beneficial with my preparation.

Don’t leave your own preparation to the last minute because it will only result in the start of your 2019 trading journey being a bumpier ride.

A few 30 minute sessions will be more than enough to start you on a smooth transition. Give your future self an easier start to the year and hopefully your future self will reward you with some profits!

I’m also interested in hearing your preparation for the new trading year so feel free to comment below with some of your own ideas.

I hope you had a great 2018 – here’s to a great trading year in 2019!