Forex Trading: Being Too ‘Trigger Happy’

Filed under: Learn Forex Trading |

 

Perhaps one of the biggest obstacles facing new traders is the constant desire to have a trade in play. Beginners to the forex market often overtrade and put trades on that are not really there. If they don’t put an order in for a few days, they begin to feel like they are doing something wrong or that they are losing money. However, the quickest way to lose money is to actually put trades on that have thin setups that are not really good enough to warrant taking a trade. Beginners do this because they want to get ahead quickly – but the irony is that they slip even further behind.

 

A much better way to trade is to (metaphorically!) have a gun held to your head, telling you that your next trade is a matter of life and death. If you think seriously about each trade in this way, you will make much better trading decisions. You will only take the very best setups with the highest probability of success. You will wait for the right trade and then you will take it because it is your best chance to ‘live’.

 

However, another potential problem facing traders is that of being frozen with fear and being unable to put orders in, even when a great trade is staring you in the face. This is the fear of being wrong, the fear of losing money, and the fear of the market moving against you. This is being scared to take your gun out of its holster (sticking with the gun metaphors!) in case you shoot yourself in the foot.

 

So there are a number of problems with trading the forex market, and these ones are all a state of mind that you need to overcome if you are to be a successful trader. It is all about finding the right balance – and this takes both time and experience.

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