Not Second Guessing the Market: Playing Probabilities

Filed under: Learn Forex Trading |

One of the problems that beginner traders have when first starting to trade the currency markets, is that they try to second guess the market, and predict the future. Nobody can predict the future with certainty, and all we can do, especially when trading, is to try to play probabilities and try to enter trades that have the highest probability of success.


One of the main problems with trading is that people find it very difficult to lose money. If someone gains $1000 and then loses $950, do you think that they feel like they have gained $50 or lost $950? The amateur traders will feel the latter, and will beat themselves up for continuing trading when they could have got out with a cool $1000. However, the professional trader knows that trading is a long-term game, and that as long as you have an edge in the market, then that edge will play out in your favour over a long series of trades.


One of the really hard lessons to learn in the currencies market is to learn how to take a loss. If you cannot do this, without emotion or regret, then you will not last long trading the forex markets. It is really important to be unemotional about your trading, and to be indifferent to the result whether it is a win or a loss. This is much easier said than done; but many famous traders share this particular trait. If you trade using price action signals at areas of support and resistance like I do, then you know that over the long term, and over a very long series of trades, the market edge will play out and you will be profitable. However, in the short term, really, anything can and does happen, and you must learn to accept this. If you do not, then you will find trading to be a really difficult struggle indeed.

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