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 struggles for direction amid USD gains
EUR/USD is trimming part of its earlier gains, coming under some mild downside pressure near 1.1730 as the US Dollar edges higher. Markets are still digesting the Fed’s latest rate decision, while also looking ahead to more commentary from Fed officials in the sessions ahead.
GBP/USD drops to daily lows near 1.3360
Disappointing UK data weighed on the Sterling towards the end of the week, triggering a pullback in GBP/USD to fresh daily lows near 1.3360. Looking ahead, the next key event across the Channel is the BoE meeting on December 18.
Japanese Yen bulls have the upper hand as hawkish BoJ outlook offsets risk-on mood
The Japanese Yen remains on the back foot through the early European session on Friday, though it lacks bearish conviction amid hawkish Bank of Japan expectations. Traders have been pricing in the possibility that the BoJ will hike interest rates as early as next week.
Editors’ Picks
EUR/USD struggles for direction amid USD gains
EUR/USD is trimming part of its earlier gains, coming under some mild downside pressure near 1.1730 as the US Dollar edges higher. Markets are still digesting the Fed’s latest rate decision, while also looking ahead to more commentary from Fed officials in the sessions ahead.
GBP/USD drops to daily lows near 1.3360
Disappointing UK data weighed on the Sterling towards the end of the week, triggering a pullback in GBP/USD to fresh daily lows near 1.3360. Looking ahead, the next key event across the Channel is the BoE meeting on December 18.
Gold losses momentum, challenges $4,300
Gold now gives away some gains and disputes the key $4,300 zone per troy ounce following earlier multi-week highs. The move is being driven by expectations that the Fed will deliver further rate cuts next year, with the yellow metal climbing despite a firmer Greenback and rising US Treasury yields across the board.
Litecoin Price Forecast: LTC struggles to extend gains, bullish bets at risk
Litecoin (LTC) price steadies above $80 at press time on Friday, following a reversal from the $87 resistance level on Wednesday. Derivatives data suggests a bullish positional buildup while the LTC futures Open Interest declines, flashing a long squeeze risk.
Big week ends with big doubts
The S&P 500 continued to push higher yesterday as the US 2-year yield wavered around the 3.50% mark following a Federal Reserve (Fed) rate cut earlier this week that was ultimately perceived as not that hawkish after all. The cut is especially boosting the non-tech pockets of the market.
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