Author: Chris Miles

How To Use Colour To Boost Your Trades

Whether you’re just starting out on your forex trading journey or are old hat when it comes to trading currency pairs, one constant remains true… you will always be learning and finding new avenues of interest that could help you up your trading performance and continue raking in the big wins.

 

With trading, a lot of your success will depend on your mental and emotional health and wellbeing – and your overall outlook can have a huge impact on how well you do on the trading floor. 

 

This is why we blog so much about psychology and the importance of mindset… because it really can make all the difference between swim and sink if you’re looking to become a professional trader.

 

Interestingly, colour has the potential to have a significant impact on your mood and it can even potentially sway your decision-making, actions and behaviour (without you even knowing about it!), so researching colour psychology and how it can affect you could make a big difference where your trading prowess is concerned.

 

What is colour psychology?

 

At its core, colour psychology is simply the study of how different colours can influence human behaviour, with the various shades associated with their own connotations and potential psychological effects. 

 

There are cultural differences, of course, and you also need to consider personal preference, but there are typical associations that different colours generally have… such as red for danger, for example.

 

Psychologist Carl Jung even went so far as to suggest that people themselves could be sorted into four different colours based on their temperaments: Cool Blue, Earth Green, Sunshine Yellow and Fiery Red.

 

According to Jung, everyone has all these different colour energies within themselves but to varying degrees and the different energies will manifest themselves depending on what’s’ going on around us, although we do have one dominant colour energy that will affect us and our behaviour the most.

 

Fiery Red, for example, is associated with being positive, decisive, assertive and bold, while Sunshine Yellow denotes a cheerful, uplifting, enthusiastic and spirited side. Earth Green, meanwhile, suggests a soothing, calming and tranquil personality, while Cool Blue types remain analytical, detached and objective, demonstrating little to no bias.

 

For traders, adopting a more Cool Blue attitude to life could be particularly useful, since people with this type of dominant energy typically lead lives based on facts, logic and principles grounded in reality. 

 

They’re highly analytical and consider all the possibilities to ensure they don’t make any uninformed decisions and enjoy approaching tasks systematically… all of which are excellent attributes for a trader to have.

 

Fiery Red energy could also prove particularly useful for forex performance and these personality types are very action-focused, capable of making swift decisions without being swayed by past events. 

 

They prioritise focus and efficiency… although this can be detrimental to a certain extent if it leads to impatience and a need to exert control over any given situation.

 

How to use colour to boost productivity

 

If you accept the theory that colour can, indeed, affect your behaviour and emotions, it stands to reason that by surrounding yourself with certain shades you can actually exert some level of influence over your mental and emotional outlook, as well as your actions and reactions.

 

Taking the time to create an appropriate office or workspace at home or elsewhere is always advisable for traders and if you don’t have a robust setup in place, you may find that your trading success never quite hits the stratospheric heights you’d like it to.

 

You need to get your head in the game for trading and your work environment is essential for achieving this, so perhaps cast a critical eye over your office and see what changes you could introduce that could give you a big productivity boost.

 

To this end, armed with your new knowledge of colour psychology, you might want to consider doing a bit of painting, or surrounding yourself with home decor items in certain shades to help keep you in the right mindset for trading.

 

But what colours to go for? Which tones would be the most beneficial to use? 

 

Green

 

A great colour to consider if you’re looking to work efficiently and with intent focus is green. This is a restful and calming colour, known for helping to improve concentration, while boosting creativity and inspiring innovative thinking… so an ideal one for aspiring traders everywhere to go for.

 

Not only that, however, but green also has links to nature and the environment, which can help improve your mental, emotional and even physical health and wellbeing… something that will really help you be a resilient and successful trader. 

 

There’s a reason why biophilia really came to the fore as one of the top interior design trends during the pandemic (and why it hasn’t waned in popularity in the years since) and that’s because being connected to nature helps us to feel happier, less stressed, more creative and more productive.

 

Blue

 

If green doesn’t float your boat, or perhaps you want to bring in a range of different colours, you might find what you’re looking for with a blue design scheme.

 

Research from the University of Texas shows that this colour may have an important role to play in increasing productivity and, in fact, it was found that people seemed to work more effectively when their working environments were a combination of both blue and green… so it could prove to be a very winning combination indeed!

 

In terms of connotations, blue has long been associated with calmness, tranquility, peace and security, which could really help centre you as you trade, no matter whether you win or lose.

 

And like green, it too has links to the natural world, with blue the primary colour of the sea and sky, so you could feel even more connected to nature if you include it in your interior design ideas.

 

Red

 

The colour red is an interesting one because it is somewhat contradictory, representing love, passion, energy and excitement, but also anger and power… so it can yield positive and negative results, depending on how it’s used. 

 

If you do want to decorate your home office in this most energetic of colours, it would perhaps be wise to use it as an accent colour rather than painting all the walls in this shade, which could become overpowering quite quickly and start having a negative impact on your trades.

 

This interesting study, published back in 2017 by the Swedish House of Finance, looked into the effects that colour can have on investment behaviour, finding that when investors are faced with potential losses in the colour red, their risk taking is reduced. 

 

And when they’re shown past negative stock price paths in red, their expectations regarding future stock returns are reduced as well, consistent with the colour red being associated with avoidance behaviour. It was also found that red can reduce the propensity to buy stocks… all of which suggests you may want to be careful in your approach with this shade!

 

That all being said, warm colours like red are also very stimulating and can certainly give you a productivity boost if used in the right way.

 

Yellow

 

Another really energising colour to consider decorating with if you want to give your trades a boost is yellow. This shade radiates positivity and can really help keep your confidence levels high and your mood equally optimistic. 

 

A happy trader is usually a successful trader and yellow can really help invoke feelings of warmth and brightness, lifting your mood and keeping you focused on the road ahead, no matter what forks appear along the way.

 

However, as with red, you also need to be a bit careful when decorating with yellow as too much of it can be a bit wearing on the eyes and cause visual fatigue, so approach with caution. 

 

Again, you may want to avoid painting your walls in a bright yellow as, despite its cheerful nature, studies have shown that people are more likely to lose their tempers when in yellow rooms… and babies are even more likely to cry when their surroundings are yellow!

 

Grey

 

If you’re looking for a calming colour to decorate with, however, grey could very well be the way to go. 

 

Halfway between black and white, grey is associated with objectivity and neutrality – which could be absolutely perfect for traders, since it’s important to maintain an objective outlook when trading, not being swayed by your emotions no matter what happens on the trading floor. 

 

The formal aspect of the colour also represents clear-headed thinking and logic… exactly what you want to engender within yourself as a trader.

 

And from a purely design and style perspective, grey is an excellent choice because it goes well with a range of other colours because of its achromatic nature, so you’ll be able to pick out shades and tones easily, even if you’re not an experienced interior designer.

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How To Use The 80-20 Pareto Rule In Forex Trading

You may have heard of the Pareto rule, which is applied to many aspects of financial trading as well as other purposes. The basic idea is that 80% of outcomes are the result of 20% of the causes. Therefore, small changes can make a big difference to the end result of a process. This theory has been adopted by forex traders to improve their strategy.

 

Here’s a look in some more detail at the Pareto Principle, and how you can use it to strengthen your forex trading performance. 

 

Where does the Pareto Principle come from?

The idea is based on the observations of the Italian sociologist and economist Vilfredo Pareto (1848- 1923). He noted during the course of his studies that 80% of the land in Italy belonged to about 20% of the population. The story goes that this observation arose from noticing that 20% of the pea pods in his garden yielded 80% of the peas.

 

This led to the development of a power law distribution based around the 80/20 rule that has been applied to many other fields, particularly in the world of business and economics. In the 1940s, a management consultant named Dr. Joseph Juran applied the theory to quality control in factories.

 

He found that it held true for the proportion of defective products in relation to faults in the production process. In other words, 80% of the issues were caused by 20% of the flaws in the production method. Therefore, efforts to improve could be focused on one targeted area, which resulted in a great improvement in quality.  

 

However, it has been applied to areas as diverse as engineering, quality control, and healthcare. Another area the principle is commonly applied is occupational health and safety, which assumes that 20% of hazards are responsible for 80% of accidents and injuries. This allows safety experts to target their efforts in the areas where they will have maximum effect. 

 

In essence, the Pareto principle can reduce the time and effort spent trying to improve the many processes that matter only a little or not at all, and allow the work to be focussed on a much smaller area that will yield much greater benefits. It’s all about making the most efficient use of time, creativity, and resources.

 

 Investors often work to the rule that 20% of the holdings in a portfolio are responsible for 80% of the growth, and thus focus their attention on the most lucrative stocks and shares.

 

How can the Pareto Rule be applied to forex?

There is no one single way that the Pareto Rule is applied to forex trading, but the general concept that 20% of your efforts will reap 80% of the rewards is a useful principle to bear in mind. Here’s a look at some of the different ways that you can integrate this approach to your trading.

 

Trade less, trade better

Less is more, as the saying goes, and many forex traders abide by this principle. One of the most effective ways this is applied to forex trading is to concentrate on making fewer trades that are very well planned, rather than a greater number of trades that have had less preparation. 

 

Many new traders are keen to respond to every fluctuation in the market, rather than having the patience to wait until there is a worthwhile opportunity to make a good trade. More experienced traders develop the discipline not to trade when the market conditions are just not there. 

 

Some traders might even tell you that 80% of the time, the market is not worth trading, but 20% it definitely is. Learn to identify that 20%, and use the other 80% to watch, wait, and keep your powder dry until the right moment. Learning when not to trade is just as important as knowing when to trade. 

 

Analyse your trading journal

Take a look at your trading journal (you are keeping a trading journal, right?) and work out which are the best and worst performing trades. You may even notice that 20% of your trades generate 80% of your profit. 

 

See if you can notice a pattern that repeats itself in your most unsuccessful trades, such as a certain time of day or currency pairing that just isn’t working for you. You may even find that your worst trades were those that you made impulsively without any proper planning and research, or were too influenced by your emotions such as greed and fear. 

 

Next, look at your best results. Do they have any factors in common? Chances are, they are the trades where you were disciplined enough to follow through with your trading strategy and remained completely objective in your decision making process. 

 

Whatever you find, look for the reasons behind the wins and losses in your track record, and refocus your energies on the techniques that are bringing you the best results. 

 

80% of trading is about risk management

Forex trading is largely a process of taking managed risks. Even the most experienced of traders accept that only about 50% of their trades will be profitable. The reason why they continue to be successful is that they are able to manage their level of risk to minimise their losses. 

 

The first step to risk management is to understand your risk tolerance; in other words, how much money are you comfortable with losing on each trade? Most forex traders are risk averse and will only risk between 1 and 3% of their account balance on each trade. Your approach will depend largely on your financial circumstances and personality.

 

Consider how much spare capital you have at your disposal, your level of trading knowledge and experience, and your temperament. Are you a natural worrier who would be kept awake at night by the thought of potential losses? Or are you someone who is comfortable with a level of uncertainty? How confident are you in your current trading abilities?

 

The other main risk management strategy is to use stop loss orders. No matter how confident you may be that you have identified a great trading opportunity, the markets are volatile and don’t always move in predictable ways. 

 

A stop loss order automatically triggers an instruction to sell the currency pair at the market price once a predetermined price is achieved. This provides you with a safety net to mitigate against incurring substantial losses on any one trade, should the market suddenly turn against your favour.

 

It is important to note that when the stop loss is triggered, it becomes a market order, and is executed at the market price, which may be higher or lower than the stop loss price. It is possible to move your stop loss after your position is open, to protect a good profit margin or to move it out of the loss zone. 

 

You may not want to set a stop loss on all your trades, but you can use the Pareto principle to identify your least successful 20% of trades and use stop loss orders for these. 

 

Applying the 80-20 rule to your time management

One of the most effective ways to apply the pareto rule to your trades is by addressing your time management. If it holds true that 20% of our actions account for 80% of the outcomes, then it’s worth examining exactly how you spend your time when trading. 

 

You may be familiar with the adage that work expands to fill the time available. This is known as Parkinson’s Law, because it was first observed by Cyril Northcote Parkinson in a 1955 essay for The Economist. In essence, it’s the idea that a simple five or ten minute task can take all day if we let it.

 

When we think that we have plenty of time at our disposal, it is easier to get sidetracked with small and often irrelevant details. We might also take more opportunities to procrastinate. Sometimes, this can be a useful learning experience, but mostly, it’s just an inefficient use of time. 

 

To test how this theory might apply to you, limit your trading time by a few hours each week, or even each day if you devote yourself full time to trading. You might be surprised at how well you begin to focus on the most important aspects of your trading routine, and spend less time on the least productive tasks.

 

Note down how spending less time trading affects the outcome of your trades over the course of two weeks or a month. Did your success rate go up or down? You might be surprised to learn that you are getting better results, despite putting in fewer hours. It might be a cliche, but working smarter rather than working harder can really pay off.

 

Focus on your best performing currency pairs

Finally, this might seem obvious, but if you trade a lot of different currency pairs, it is likely that 20% of them are generating 80% of your profits. Unless you particularly enjoy the challenge of trading minors, it’s best to focus on the strongest currencies.

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How To Become A Morning Person

There are lots of skills you’ll need to develop when first embarking on your career as a forex trader and you are likely to find that you’ll need to make quite a few lifestyle changes at the very beginning if you’re to drive serious success your way.

 

Working on your analytical skills is a must, of course, as is developing patience, mental resilience and emotional fortitude, anger management, motivation, determination, focus, discipline… the list goes on and on, and you’ll also likely find that the list grows the more you trade.

 

New and inexperienced traders learn a huge amount about themselves while trading and being able to identify your weaknesses and vulnerable areas, in terms of both your personality and your lifestyle, is important so you know where to focus your attention first. 

 

It may well be the case that you need to make a few significant changes here and there if you are to enjoy a lucrative career and make it big as a professional trader – so don’t be shy about asking yourself the difficult questions and being strong enough to enact meaningful and long-lasting change.

 

When it comes to success, whether that’s as a trader or in some other profession, there’s something that all leaders in their chosen fields seem to have in common… and that’s getting up very early in the morning.

 

The old adage that the early bird catches the worm certainly does seem to ring true and there’s a growing body of research backing this tidy little cliche up.

 

It seems that being an early riser is associated with all sorts of positive behavioural traits, everything from being more proactive and more productive to being calmer, more relaxed and healthier overall in general… all of which will really help you on your quest to become one of the top traders in the world.

 

Interestingly, many of the very best investors out there think the best time to trade is between 8am and midday, because this is when the London and New York exchanges overlap and these are generally the busiest markets for forex trades.

 

This means that you’ll have to get up pretty early if you’re going to take full advantage of the most lucrative trading times and get ahead of the competition. You probably won’t see the success you’re looking for if you roll out of bed at 07:59. 

 

Winning trades often comes down to state of mind and mental acuity, so getting out of bed far earlier and being proactive with your morning before you even think about trading will likely stand you in excellent stead in your trading career.

 

So, with that in mind, here are a few strategies you could consider trying out if you are keen to get out of bed at the crack of dawn (or even before that!) without much trouble at all. Which of these will you put into practice first?

 

Change your inner dialogue

 

If you’ve been a night owl for a long time, it can be very difficult to change your habits and your way of thinking… and it’s likely that you will find it hard to alter your routine at first. 

 

A good place to begin is with changing how you talk to yourself and switching your internal dialogue around so that you’re not constantly reaffirming your preference for night-time hours to yourself. Instead of saying to yourself that you’re not a morning person, why not try telling yourself that you’re becoming a morning person?

 

This may sound like it’s too simple to be effective, but mind over matter can be very powerful and you may well find that by changing your thinking and your inner monologue, you find it easier to enact changes externally as well.

 

Build incrementally

 

Your system will probably struggle a little if you suddenly start trying to wake up at 5am without giving it any warning. Build it up bit by bit so you can acclimatise yourself to your new schedule gradually, giving yourself more time to get used to the new way of working and maximising your chances of actually being able to stick to it.

 

Be consistent with your routine

 

Having a set bedtime and waking up time will make all the difference to how you feel when it is time for you to get up. Shifting your sleep patterns isn’t easy but the first step towards making real inroads in this regard is to maintain the same sleep and wake up times for prolonged periods. 

 

Setting an alarm is very useful, of course, but what you’ll likely find is that after a couple of weeks your body wakes you up naturally a few minutes before you’re due to get up… and this is a surefire sign that you’re on the right track.

 

Have a morning routine

 

Routine is so important and there are all sorts of benefits associated with it, everything from better sleep and less anxiety to less stress and better mental health overall. Coming up with your own morning routine can help ease yourself into the day and it’s all about finding out what works for you.

 

This could be anything from washing your face immediately to making a coffee and hitting the gym, or going for a run first thing. Meditation could be another option, while other traders may want to start with some journaling to get them into the swing of it all before they switch the laptop on.

 

The key to building up a successful routine, no matter what it is, is to make sure that it’s sustainable and something you enjoy, perhaps even something you look forward to. Then you’ll have no problems leaping out of bed, ready to attack the day!

 

Get ready for bed

 

Getting ready for bed helps your body get ready for sleep… and this will increase the quality of rest you get, which will help you wake up in the morning more readily. 

 

Again, your routine will largely depend on who you are as an individual and what you like to do, but it could include drinking a hot beverage and winding down with a book, putting on pyjamas, practising self-care by washing your face and moisturising, staying off your phone and other devices for at least two hours before bed and so on.

 

Setting boundaries can also be very useful as you don’t want your mind to bounce back to alertness, so perhaps consider putting your phone on Do Not Disturb after 9pm so that you don’t receive any phone calls, texts or other notifications.

 

Get morning sun

 

Natural light is incredibly good for us and light exposure can really help you in your quest to become a morning person. Whenever possible, head outside early in the morning and soak up those rays, whether that’s by going for a little stroll with the dog or simply taking your morning cup of coffee outside with bare feet to practise grounding.

 

Getting a hit of vitamin D early on can help you fight fatigue and boost your mental health, as well as easing any feelings of anxiety and depression you may be experiencing and even helping to improve your sleep patterns and sleep quality.

 

From a science perspective, morning light has both infrared and blue light wavelengths, which means there is no UV light when you step out first thing in the morning. Think of yourself as a battery and the morning sun as the charger… you can give yourself a big energy surge if you get out and about early in the morning.

What’s more, research suggests that getting rays early in the morning can actually help protect you against UVA and UVB rays later in the day, helping to fortify your skin against potential sun damage… so it’s a real win-win!

 

Give grounding a go

 

While you’re out enjoying your morning sun, why don’t you give grounding a try to see if that helps you feel more alert in the early hours? Also known as earthing, the practice involves kicking off your shoes and socks and touching the ground with your feet, something that many believe can have all sorts of positive benefits for the mind, body and soul.

 

In terms of health, a growing body of research suggests that grounding can help you sleep better, feel less stressed, improve your mood, reduce feelings of depression, boost your heart health, improve circulation… and a whole lot more besides!

 

What’s great about it is that it can be done wherever you are and you don’t need any specialist equipment to start reaping the benefits. So the next time you’re up early and have a spare 20 minutes, why not give it a go and see if it could make a difference to how you’re feeling at the crack of dawn?

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Why Self-Discipline Is Essential For Forex Traders

Forex trading demands a whole range of skills, from technical analysis to market knowledge and emotional maturity. However, to all this the successful trader needs to add another essential ingredient to make it all work together: discipline. Here’s a closer look at what discipline means in the context of forex trading and how you can develop or improve it.

What does discipline mean in forex trading?

The Collins Dictionary defines discipline as “the quality of being able to behave and work in a controlled way which involves obeying particular rules or standards.” In forex trading, this means being able to develop and stick to your trading strategy, always following your risk management plan, and maintaining an objective viewpoint at all times. 

It may also encompass other factors, such as keeping your learning and market knowledge fresh and current, furthering your technical knowledge, and being able to stick to a daily trading routine. 

Why is discipline considered to be so important in forex trading?

Successful forex trading requires above all a structured approach, so that all your trading decisions are based on the current market conditions, and are aligned with your personal trading strategy and goals. A casual or haphazard approach to trading means that sooner or later you are going to make mistakes that could lead to heavy losses.

Trading requires you to make quick decisions under pressure, and when the stakes are high it takes effort to overcome powerful emotions such as fear, anxiety, and greed. Experienced traders work hard to manage their emotions, and learn not to be swayed too heavily by the prospect of failure or success.

How do you develop discipline as a forex trader?

Self-discipline can be practised by anyone, no matter what their personality type is. It is not an innate trait we are born with, but it is something that can be learnt. Like a muscle, the more we work at it, the stronger it gets. 

At the beginning of your trading career, you will make mistakes and experience a few lows, but the right mental attitude will carry you through to more long-term success. Here are some points that will help you to develop and maintain the right mindset.

Set clear achievable goals

It can be easy to become overwhelmed by the prospect of learning how to be a successful forex trader, and this can lead to a sense of paralysis. Instead of getting bogged down in detail, set yourself a series of clear and realistic goals to work towards. 

Avoid setting numerical targets, such as needing to make a certain amount of profit each month. If you have given up your day job and intend to make your living as a forex trader, you may expect to earn a fixed amount of money each month to replace your salary.

 However, there is no such thing as a steady income in forex trading, and even the best traders will make a variable monthly amount. Chasing numerical targets can lead to poor trading decisions, and is unlikely to yield the best results. Profits are the byproduct of a disciplined trading system, and not a goal to be single mindedly pursued. 

Instead, use the following methods to keep you on the right track.

Set out your trading strategy

A well defined trading strategy is the key to successful forex trading. This should include which signals you will use to enter and exit the market, what your maximum number of trades per day or week will be, and what hours you will be trading each day. You should also decide if you prefer short term trading or long term trading.

Work out your risk tolerance

It is absolutely essential to know how much you can realistically afford to lose on each trade before you begin trading. This may depend on how comfortable you are with risk and how much capital you have at your disposal. You should never expose yourself to damaging losses that would compromise your ability to pay for life’s essentials.

Use a stop loss

Stop losses are a tool that enables you to automatically exit a trade at a specified point below the entry price. They can act as a buffer against volatile and unpredictable market conditions, so if the price action suddenly swings against your expectations, you will be protected from uncontrolled losses.  

This can help to guard against the natural human tendency to hang onto a losing trade in the hope that the situation will turn around, rather than to cut your losses and run. If you think that you have enough presence of mind to decide for yourself when to exit a trade, remember that almost all professional traders use stop losses.

When we are faced with a difficult decision under pressure, most of us will subconsciously follow some kind of cognitive bias. Assuming that you are immune to such human frailties will only put you in a weaker position, because like it or not, all humans experience powerful  emotions and denying them can be dangerous in forex trading. 

When faced with the prospect of making a bigger profit or trying to avoid a loss, even the most stoical of personalities will have a natural tendency to either reach for more or hedge against a losing position. This is a primal evolutionary instinct leftover from the times when it literally meant the difference between starving or surviving. 

A predetermined exit strategy such as a stop loss is based on objective and rational information only, which is ultimately what forex traders should be aiming for at all times. This brings us nicely onto the next point…

Understand forex trading psychology

A major part of your discipline as a forex trader is learning to manage your emotions. As we have already discussed, letting your emotions bias your trading decisions can be potentially disastrous. Some people hold the belief that admitting to their feelings is a weakness, but in fact it can put you in a much more empowering position, in life as well as in forex trading. 

No one is immune to psychological bias, and being able to recognise them in your own thought and behaviour patterns is key to avoiding the trading pitfalls that they can open up. Here are some of the most common biases in forex trading.

Overconfidence bias

This is a very common bias in novice traders who have experienced their first flush of success. After all the hard work of learning the ropes and feeling like a newbie who doesn’t quite know what they are doing, a string of profitable trades can be a huge ego boost. 

There is nothing wrong with taking some time to enjoy your success; after all, if we didn’t allow ourselves to enjoy the fruits of our labour, it would be rather miserable and demotivating. Taking some time to work out what you did right is also important, because it strengthens your trading strategy. 

However, some traders are prone to become too intoxicated by their success, and assume that every future decision will be right. This can lead to a relaxing of discipline and poor trading decisions will be the result. No matter how well you have done, do not be tempted to ease up on the rigours of daily market analysis and strict risk management.

Loss aversion bias

The flip side of overconfidence bias is loss aversion bias. This is when a trader is too conscious of the prospect of loss, and this hampers the ability to pursue profits. For many people, the fear of losing overrides the instinct to make gains, and it can lead to overcautious decisions. 

Forex trading is all about learning to take managed risks, based on daily market research and analysis. It does not pay to be either too cautious or too confident, but to learn how to put your emotions or biases to one side and make objective decisions at every stage.

Keep a regular trading journal

This is one of the most repeated pieces of advice to new forex traders, but it really is one of the most effective tools you can use to develop and improve your trading skills. It does take some discipline to add yet another task onto your daily checklist, especially when you may not notice the immediate benefit. 

By recording what trades you have made and when, and the reasons why you made them, plus any other thoughts or observations you may have at the time, you will have a brilliant resource to refer to in the future. It can help you identify patterns of success, or pinpoint what went wrong if you have a run of poor trades, leading to a stronger strategy going forward.

Guard against your comfort zone

Once you have found your feet in the world of forex trading, and are starting to build up a record of steady profits, it can be tempting to take your foot off the gas for a little while. Be on your guard against settling into a comfort zone, and always push yourself to remain open to new opportunities.

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4 Breathing Techniques To Help You Deal With Stress

As rewarding as trading can be, there’s also no denying that it can be incredibly stressful, particularly when you first start out with forex, as there’s so much to learn, so much to take in and so much to get to grips with.

It’s entirely understandable if you feel your blood pressure start to rise when you first start trading currency pairs, but it’s essential that you give yourself all the tools and resources you need to help you keep your emotions under control.

As we’ve said before (and as we’ll no doubt say again), emotional management is one of the top skills you’ll need to develop as a trader. Emotional trading is always ill-advised, whether you’re feeling stressed, anxious, sad, happy, angry or something else. 

You need to make your decisions when you’re level-headed and thinking clearly, so you know you’re acting rationally and aren’t being swayed in one direction or another by some underlying urge. Succeed in this endeavour and you’ll likely see more consistent wins over time. Fail and you’ll likely start to see your profits take a hit.

But how do you go about regulating your emotions and how do you stop them from taking charge?

As with anything, it all comes down to practice and making sure that you have all you need at your disposal to help you take a step back, calm down and remain in control, no matter what happens on the trading floor.

To that end, you will likely find that focusing on your breathing can help you centre your mind, calm your nervous system and keep you on the straight and narrow. Here are just a couple of breathing techniques you could try that may well stand you in excellent stead throughout your trading career.

Nasal breathing

Breathing deeply in and out through the nose is an incredibly effective way of reducing feelings of anxiety and you can practise it at any time, no matter what you’re doing, so you’re sure to become an expert at it in no time at all.

Nasal breathing is a more relaxed way of getting the breath you need, helping to lower your blood pressure and keep your heart rate in check, so it could yield all sorts of positive effects for traders, both novice and experienced alike.

It can help stimulate your parasympathetic nervous system, instead of your fight or flight responses, so it keeps you calm even when you’re faced with seriously stressful circumstances… again, essential for traders of all kinds and at all levels.

Of course, we tend to breathe without thinking about it, so you may be breathing through your mouth without even knowing about it. 

The first step to switching to nasal breathing is to become more aware of your breathing patterns, looking out for if your mouth drops open naturally, if your nostrils are regularly blocked and if you wake up regularly with a blocked nose and a dry mouth.

Looking for an exercise to try? What about practising alternate nostril breathing, where you inhale through one nostril and then exhale through the other, using your finger to close the opposing nostril each time. 

This is also a great mindfulness technique since you’ll need to focus quite closely on what you’re doing, helping to clear your mind and making you feel even less stressed and anxious as you breathe.

Belly breathing

Diaphragmatic breathing (also known as belly breathing) is another brilliant way to help keep yourself calm, no matter what’s happening with your trades.

It may be a little trickier than nasal breathing to get to grips with, but the benefits can be extensive once you know what you’re doing. 

Again, you may not necessarily be aware of just how important your diaphragm is for your breathing since everything happens relatively automatically, but this muscle (which can be found at the base of your lungs) actually has a really essential role to play with your breath. 

When you inhale, it tightens and moves downwards to create more space in the chest so your lungs can then expand even further. And when you exhale, the muscle relaxes, moving back up into the chest cavity.

Belly breaths means you can take bigger, deeper breaths, so you’re working to encourage full oxygen exchange, which in turn then helps to slow your heart rate and reduce your blood pressure… which can prove very useful indeed from a trading perspective.

To get started, lie down on the floor or on your bed with your knees bent and a pillow beneath your hand. Place one hand on your chest and the other on your belly, just under the ribcage. 

Breathe in slowly through the nose and direct the air down towards your belly, feeling your hand rise as your belly does. The hand on your chest should remain still – which is how you know you’re doing it right. Practise this a couple of times a day (you can also do it sitting on a chair, if that’s more practical) and you’ll soon get the hang of it.

Bellows breathing

The next time you’re stressed and anxious, pay attention to what happens with your breathing. You’ll probably find that your breaths are shorter, more irregular and more shallow than they are when you’re calm and you’ll probably find that your chest and shoulders come up when you inhale. 

That’s because your sympathetic nervous system has been triggered by something and your fight or flight responses are now in charge.

Focusing on your breathing helps you to calm down, make you feel better and allow you to start thinking more rationally – something that bellows breathing techniques can really help you with.

Also known as Bhastrika, this type of breathing is something you often come across in yoga practice and it’s a popular one because it can help with stress, is energising and can potentially drop your heart rate and blood pressure, all at the same time.

To start, sit up and make sure your shoulders are relaxed. Take a few deep breaths through your nose and fill your belly with as much air as you can each time. Breathing from your diaphragm, quickly and forcefully inhale and exhale through your nose, aiming for ten breaths per cycle.

At the end of each cycle, take a break and breathe normally, then return to your bellows breath and repeat for three cycles. Once you’ve got to grips with the technique, you can start increasing the number of breaths and the number of cycles you are able to do.

Because it’s so energising, you may find that you prefer practising this technique first thing in the morning as a sort of wakeup call to get yourself all pumped up and ready to take on the day.

Humming bee breath

Yogic breathing can really help our physical, emotional and mental health and if you’re keen to put it into practice, the humming bee breath technique could be a great place to start… although you may want to make sure that there’s no one else around if you’re on the shy side, since you’ll be making lots of noise as you do it.

It involves making a humming sound as you breathe out, rather like the noise that a bee would make (hence the name!), and it’s thought that the sound and vibrations can really help release tension, soothe your anxious and stressed mind and help you feel more relaxed as you breathe.

To get started, sit down and make yourself comfortable somewhere, then close your eyes so you can really focus on what you’re doing and aren’t distracted by anything around you. Take a couple of moments to breathe in and out slowly through your nose, identifying any areas of tension in your face and body to encourage them to relax.

Using your index fingers, close off the tragus cartilage or cover your ears with the heels of your hands, then inhale and exhale deeply through the nose while your ears are covered. As you exhale, emit a humming noise – similar to a bee in tone. Repeat for six to ten cycles of breath, focusing on the sound of the breath and the vibration of the hum itself.

The idea is to strike a balance between the hum being strong enough for you to feel it but quiet and gentle enough for it to be relaxing for you. Tune into the vibration and see where you can feel it… hopefully it should be nice and soothing!

Once you’ve finished your cycles of breath, check in with yourself and see how you feel mentally, emotionally and physically. Hopefully, you’ll feel less agitated and stressed, less anxious and better able to tackle the tasks ahead.

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