Forex trading also called day trading is comes with extremely high risks but still attracts a lot of real capitalists in our society today. It can be considered a very bloodthirsty game where the only object is, well, money and there is nothing but winners and losers and nothing in between. There are a lot of things that can separate the losers from the winners and a good trader knows these things. A lot of people might think there are a lot of different secrets that separate the winners and losers but it’s rarely the case. It’s really a serious game of severe discipline and having emotional restraint as a skill is something that is needed. There are seven things thought that you can do to avoid a disastrous day. Those are the seven deadly sins of Forex trading.
- There is tons of talk about how you have to follow your gut instinct at all times when you are trading. In reality, you better consider leaving those gut feelings at home when you start trading. To those that are very successful, it’s more of a science to them than anything to do with gut feelings or intuition. You need a complex and disciplined approach for your trade entries as well as your exits before you even think of making a trade.
- Understand that this is considered a zero sum game and well money, in this kind of a game is merely measured in equity. Understand that you don’t have to win every single trade. You don’t even have to win a really high percentage of them. What you need to do is to make sure that you make more money than you lose overall. Face it, you are going to lose trades and you are going to make bad trades. But knowing that your trade is bad can be very valuable info that can be applied onto a different decision and redirect it to help avoid other losses.
- Volatility can be extremely high so you need to make sure that you keep your eyes on the markets volatility and don’t ignore it. Don’t sit there and think that even if the market is hitting some rough water that it’s going to calm down. This actually means that trying to make precision trading is going to be almost impossible and you better start heading back to dry land. If you decide to try to ride it out you could end up saying goodbye too all of your hard earned cash.
- Don’t be a cheerleader and pretend that you know your trade is going to go good. You have absolutely no way of knowing this. You need to instead enter into the market with a high respect for it’s mystery and how it moves. No matter what anyone tells you or what you might think, there is no sure fire system or approach for any entry.
- Never take an amount of money to play with that makes you feel nervous. If the amount of money you are dealing with makes you immensely uneasy then you shouldn’t be exposing that amount of money to the risk. Every trader has a threshold and you need to find yours and then only play with the money that you will feel comfortable losing, because you are going to lose money, that is certain.
- Never think that the only thing that affects the trades is the world within your own world. You need to make sure that you understand and keep tuned in on what’s going on all over the world when it comes to currency because Forex is global. So make sure that you have access to information that comes from places like Bloomber or CNBC.
- Don’t hang in there if you are having a bad day. You need to call it a day when you just can’t seem to get anything to go in your direction. The biggest regret that most traders have at the end of the day, when it’s a bad day, is that they tried to hold on for way too long. You need tolet go of your losses and begin the next day with fresh goals for the day.