Indecision: How to Handle it?

Filed under: Learn Forex Trading |

Screen shot 2013-02-22 at 09.54.20Have you ever put an order in for a trade, and then cancelled it a few minutes later? Have you then put the order back in, and then cancelled it again? If you have, or if you are struggle to make firm decisions in the forex market – then read on…

 

I discussed a trade setup a while ago whereby cancelling an order possibly cost me a 10% rise on the bank. This indecision usually coincides with a bad run of results, and makes you unsure and low on confidence regarding your trading system or methodology. When things are going well, it is easy to put orders in, as you are in effect playing with the money that you have just gained. However, when you are carrying a loss, it is much more difficult to put new trades on. You start to look for that perfect setup, and you perhaps let a number of good trade setups go.

 

What we have to try and do, as traders, it to trade in the same way no matter if things have been going well or going badly. We have to make the same decisions when we have just had five losing trades, and when we have just had five winning trades. Confidence can also be just as damaging as a loss of confidence. When we are over confident, we sometimes take weak setups, thinking that we are invincible; and when we are low on confidence, we pass on perfectly good setups. The key is to stick to your rules and try and make the same trading decisions no matter what your run of results has been like. This is how successful sports teams approach games, and this is how you too should approach the forex markets. If you do not, and you trade with your emotions, then it is likely that you will be treading water at the very best.

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