For those involved in Forex trading, this is a catastrophe that most experienced .
What I heard from many of you out there is that yesterday was a Bloody Friday .
I am going to talk about those of you that were playing with Gold ( as these experiences I got straight to my inbox ) , but it covers any pair, any market…
How did it happen , and why to you ?? Same questions every time…
This is why :
- You have watched Gold rallying Up for weeks – you didn’t participate, or even if you did, you may be made some little profits / loss
- Past performance made you mad – Oh my God I should bought it
- If you were late to buy it, now it is the time to Sell it – it will go down the same way it went up
- You were already mixing all these information that you have picked up from the net ( Information overload ) and lost a perspective of the fact that you should be trading only what you see and Not what you think or expect.
- You also started mixing fundamental and technical info Big time.( make your mind – you are technical or fundamental trader – all those so deep , mindboggling statements coming from the Untouchable Gurus of the market , that you can and should follow both approaches in trading – BS )
- So now you gonna be lucky….
Wrong !
Biggest enemies of any trader :
Impatience
- Missed opportunities
- Getting lost in combinations
- Fear
- Greed
- Luck
And the biggest one of all – HOPE
Impatience – will make you overtrade and make more losses then profits
Missed opportunities – will make you so frustrated that you are not going to be able to think straight
Getting lost in combinations – you won’t know should you buy or sell anymore
Fear – will either freeze you , so you won’t enter a position or will kick you out of a profitable position way too early
Greed – you gonna end up seeing nice profits ( you won’t take them ) just to close your position with minimal profit or even loss
Luck – this is not a Casino and if you want to go with luck, better play Lottery
But Hope – Hope is the margin killer !
Once you start hoping, you are doomed, and most probably you won’t exit the loosing position , until your margin is wiped out.
I am not going to elaborate now on all aspects of trade , systems, approaches and so on – I am just going to state the obvious:
Risk Reward Ratio – 1:2 and Up
Stop loss pre-set on your trading station , before you enter the position
Follow the rules of the engagement – execute when you see the signal ( whatever system you use, there is always The Signal ) and not when you feel like it
Close your dealing station when you start feeling kind of lost in space or frustrated ( shut down the comp…even better )
Never Ever go against the very strong trend – stop trying to pick up Tops and/or Bottoms
Do not over leverage your position
If you just used stop loss , you would end up the day kind of down, your weekend would be filled with extra work on your system and Monday you’ll be ready to fight again.
But you didn’t…so what now ??
Well, if you still believe that you can master this game and come out as a winner, it is about time to go back to Demo trading.
Do your homework , like your life depends on it – as it does ( at least trader’s life ), put everything in perspective – all your dreams, plans, your knowledge, expectations…
Check your system thoroughly, going in past for as long as possible.
Once you do the past performance, start checking it out in real time in Demo trading.
Do not CHEAT – you are cheating only yourself.
And start real trading only – ONLY if all that you did shows you real results.
Never break the rules – have them written on a piece of paper, stick it to your computer screen – big typed letters in RED
If you come to be able to follow the rules and accept the reality if the market, we can talk in details about the creation of the systems, tips how , when, where , which pair and so on.
I hope ( this is when you can Hope ) that this article might help some of you , but those that won’t accept these facts – you should not get involved.
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