3 Ways of Building Confidence in Trading

Confidence is such an important aspect in trading overall for traders learning the skill of trading. It helps a trader by eliminating and reducing fear when considering a trade in the market, while also allowing us as traders to hold trades longer for more profits and potential reward or to cut losses when needed as well ( relating to following a trading plan and management process ).

In the video below and this articles topic I go over 3 ways a trader can help increase confidence and follow their trading plan during certain times, when normally they would possibly experience fear or worry.

The number one aspect is following a high probability strategy or methodology, not a strategy that is experimental, instead a strategy that focuses on the core market dynamic processes. The reason for this is that the core market dynamic processes are the proven major driving forces of the market. Some key examples of core market dynamic aspects includes Major Structure aspects, Trend Evidence aspects, reading Candlesticks and Fibonacci confluences.

The second way I would like to highlight is spending time in the learning phase of trading back-testing and getting a feel for how a particular strategy ( or strategies ) works long term. This can be done for free by pulling the charts back on MT4 or similar and clicking F12 key to go candle by candle or can be done using a simulation testing program such as Forex Tester 2 ( recommended back-testing tool ).

Above – Video on Building Confidence in Trading

The third aspect or way of building confidence for a trader is by starting your trading on a demo account. What this does is eliminate the fear aspect while learning trading and following a trading plan as a skill and then when a trader is more confident and a trader has tripled or quadrupled a demo account, then a trader can consider going to live from demo. As another option, if a trader wants to risk real money when learning, then a trader can start with a micro trading account and build their confidence from there.

how to build confidence in trading

What the 3rd aspect does, is it takes away the psychological aspect of risking real money until a trader is fully ready and skilled in this business.

Overall, confidence building in trading for a newer trader comes down to 3 important processes, having a good strategy, back-testing that method and getting an understanding of the market before going live or risking real money.

About Timon Weller

Timon Weller is the professional Writer and Trader behind the blog Forex Reviews. Timon Weller is also a professional Teacher of Price Action Trading and creator of the popular Training Series teaching people how to trade Price Action effectively called The Engulfing Trader. For other Forex Training available here at Forex Reviews click here.

For more on Timon Weller Click Here. To Learn more about How to Trade the Market and get updates Click Here.


  1. Good post Timon. We can be our worst enemies in trading.

  2. I think you pointed out the main aspects for new traders Timon. Those, however, should even be used for more experienced traders who want to implement a new trading system. I liked the spotlight you put on backtesting and trading on a demo account (forward testing). Once I did these two things, I saw great improvement in my trading. I find it funny though that some traders/coach recommend starting straight away on a live account. For me that’s just not how the process work.

    Anyway, great post and keep the good stuff coming!

  3. For successful Forex trading confidence must be needed. Thanks for sharing this useful article and effective video .

  4. Marvin Philipp says:

    Well Put Timon, Back testing is great, if gives one the confidence , I love my Forex tester two, it fun, anytime I want to practice a strategy or tactic, I can, I see the results and if your account is growing. To me its a video game on the forex market, Trading is not as easy as it looks I find. in the middle of a position your account goes up and down before then it hits one of your targets. Forex tester is great! I love it, amazing tool!

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