If you are like most forex traders, you probably bang your head on the desk several times a week because you missed a winning trade that you knew you should take. You almost squeezed the trigger, but you backed out at the last minute. The next thing you know, the market has moved 150 pips in the right direction, and you have missed an opportunity for thousands in profits. If only you had done what you knew was right ...
If it’s any comfort, you’re not alone – and the good news is that you can do something about it. The first thing to ask yourself is why you are gun shy. In some cases, this can simply come down to fear – particularly if you are on a long losing streak. In other cases, there may be a fundamental confidence problem – you just don’t believe that you can be a successful trader.
At other times, the problem can be traced back to an unclear trading strategy or one that is too complicated. It’s also a mistake to place too much emphasis on individual trades – this creates too much pressure, making you hesitant. Remember that forex trading is about making long-term profits, and that you will have both wins and losses along the way.
Let’s look at the issue of trading strategy first. You need to have enough confidence in the signals that you are seeing to know when to pull the trigger – and when not to. If you are uncertain about signals, spend time practicing with a demo account until you really believe what you see. If you still find that you are having difficulties, this is probably because you don’t understand your trading strategy well enough. This is the case, take a course or study by yourself until the strategy is crystal clear in your mind.
Of course, trading with a demo account will give you confidence in signals, but it won’t deal with the psychological aspects of trading with real money. It’s easy to be confident and pull the trigger when there is nothing at stake, but fear and uncertainty kick in when your hard-earned cash is on the line. All that practice will have shown you that you can be a successful trader, so you now need to avoid anything that introduces doubts into your mind.
One of the things that destroys confidence is going over ‘mistakes’ that you think you have made. Hindsight is always 20/20 – if we could go back in time and redo our trades based on what happened subsequently, we would all be billionaires. Focus on future trading opportunities, not past failures. Also, don’t get rattled by individual losses – these are normal and nothing to be ashamed of, provided that you stuck to your trading plan. If you learn to accept losses and emotionally, you will be able to pull the trigger every time you should.
If it’s any comfort, you’re not alone – and the good news is that you can do something about it. The first thing to ask yourself is why you are gun shy. In some cases, this can simply come down to fear – particularly if you are on a long losing streak. In other cases, there may be a fundamental confidence problem – you just don’t believe that you can be a successful trader.
At other times, the problem can be traced back to an unclear trading strategy or one that is too complicated. It’s also a mistake to place too much emphasis on individual trades – this creates too much pressure, making you hesitant. Remember that forex trading is about making long-term profits, and that you will have both wins and losses along the way.
Let’s look at the issue of trading strategy first. You need to have enough confidence in the signals that you are seeing to know when to pull the trigger – and when not to. If you are uncertain about signals, spend time practicing with a demo account until you really believe what you see. If you still find that you are having difficulties, this is probably because you don’t understand your trading strategy well enough. This is the case, take a course or study by yourself until the strategy is crystal clear in your mind.
Of course, trading with a demo account will give you confidence in signals, but it won’t deal with the psychological aspects of trading with real money. It’s easy to be confident and pull the trigger when there is nothing at stake, but fear and uncertainty kick in when your hard-earned cash is on the line. All that practice will have shown you that you can be a successful trader, so you now need to avoid anything that introduces doubts into your mind.
One of the things that destroys confidence is going over ‘mistakes’ that you think you have made. Hindsight is always 20/20 – if we could go back in time and redo our trades based on what happened subsequently, we would all be billionaires. Focus on future trading opportunities, not past failures. Also, don’t get rattled by individual losses – these are normal and nothing to be ashamed of, provided that you stuck to your trading plan. If you learn to accept losses and emotionally, you will be able to pull the trigger every time you should.
Editors’ Picks
EUR/USD recovers modestly, stays below 1.1900
EUR/USD gains traction and edges higher toward 1.1900 in the second half of the day on Thursday. The US Dollar struggles to benefit from the upbeat employment data following an initial positive reaction, allowing the pair to find a foothold.
GBP/USD holds above 1.3600 after UK data dump
\GBP/USD moves little while holding above 1.3600 in the European session on Thursday, following the release of the UK Q4 preliminary GDP, which showed a 0.1% growth against a 0.2% increase expected. The UK industrial sector activity deteriorated in Decembert, keeping the downward pressure intact on the Pound Sterling.
USD/JPY consolidates around 153.00 favoured by lower Fed easing bets
USD/JPY steadies around 153.00 after hitting two-week lows at 152.25. A strong US Nonfarm Payrolls report provided some support for the US Dollar on Wednesday. The Yen remains on track for a 2.6% weekly rally, boosted by Takaichi's victory at Sunday's elections.
Editors’ Picks
GBP/USD holds above 1.3600 after UK data dump
\GBP/USD moves little while holding above 1.3600 in the European session on Thursday, following the release of the UK Q4 preliminary GDP, which showed a 0.1% growth against a 0.2% increase expected. The UK industrial sector activity deteriorated in Decembert, keeping the downward pressure intact on the Pound Sterling.
EUR/USD recovers modestly, stays below 1.1900
EUR/USD gains traction and edges higher toward 1.1900 in the second half of the day on Thursday. The US Dollar struggles to benefit from the upbeat employment data following an initial positive reaction, allowing the pair to find a foothold.
Gold sticks to modest intraday losses as reduced March Fed rate cut bets underpin USD
Gold languishes near the lower end of its daily range heading into the European session on Thursday. The precious metal, however, lacks follow-through selling amid mixed cues and currently trades above the $5,050 level, well within striking distance of a nearly two-week low touched the previous day.
LayerZero Price Forecast: ZRO steadies as markets digest Zero blockchain announcement
LayerZero (ZRO) trades above $2.00 at press time on Thursday, holding steady after a 17% rebound the previous day, which aligned with the public announcement of the Zero blockchain and Cathie Wood joining the advisory board.
A tale of two labour markets: Headline strength masks underlying weakness
Undoubtedly, yesterday’s delayed US January jobs report delivered a strong headline – one that surpassed most estimates. However, optimism quickly faded amid sobering benchmark revisions.
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