Who are the losers in forex trading
Winning traders versus losers
It is not enough to have a good strategy to make money in the forex market. When two traders use the exact same method of investing, they usually have different or opposite results. There is only one explanation for this phenomenon, the difference is the result of the psychology of forex traders who think and act differently depending on their personality and previous experience.
Here are the differences that separate the winning forex traders from the losers.
Winning traders have realistic profit targets for their trading capital. Your ambition is not to get rich quick. This mentality contributes to their success because they do not make emotional mistakes and excessive risk taking.
Losing traders often have an ambition to make a lot of money without considering the funds at their disposal. It's not uncommon for traders starting out in the Forex market with a $ 100 account to think that they can turn it into $ 1000 in a matter of months. This mentality naturally leads to the fact that the trader takes enormous risks, which inevitably lead to considerable losses.
Successful traders manage risk effectively, they are not afraid of losing money on a trade, this allows them not to be emotionally attached to the results. Losing traders usually begin trading with money management rules, but they often leave these rules due to a series of losses or gains. Pro traders continue to manage risk regardless of the series of losing or winning trades. They know that every moment in the forex market is unique and that anything is possible. You are therefore constantly aware of the dangers and typical mistakes that lead to insufficient success.
Forex traders who are losing tend not to know how to effectively manage risk. They often spend a lot of time in front of their computer screens, fixing themselves at their current positions. The euphoria of profit increases their confidence, after winning a trade they are more inclined to increase the risk on the next position. When they lose a trade, they also increase the risk (and therefore lot size and leverage) to try to win back the lost money.
Losing traders do not control their emotions like successful investors who have developed conscious thought processes based on discipline.
Winning traders have profit goals set by their strategy, while losing traders tend to make small profits compared to losing trades.
It is important to understand that risk management is the key to success, the benefit of course lies in rigorous risk management in relation to the expected benefit. But in order to do this, the trader must act with composure and determination. The only effective way to avoid emotional failure is to set an entry and exit level before you even trade, and in order not to change your mind afterwards, it is recommended that you not stay connected to the trading platform at all times .
Losing traders take small profits relative to the risk because they do not carefully plan their strategy before executing the trade. Most of the time they cut the position prematurely because the risk taken is too high. A strategy that puts profits below the risk taken will not be successful in the long term, with this method the success rate has to be high in order to make money. The best trading strategies have a success rate of around 30 to 50% and are profitable thanks to the risk / reward ratio.
The trading strategy
What really sets good traders apart from bad traders is their ability to stay disciplined and how they manage their emotions. But strategy is also important, the best forex strategies are simple, the hardest for the novice trader is to wait for the right market configuration that fits the strategy perfectly. Professional traders are patient! They are able not to trade when there are no real signals unlike bad traders who jump at the first opportunity without really mastering their strategy and think they are able to predict what will happen next. In reality, they have no control over anything! Successful traders know that the market is an indomitable beast and that the only thing they control is their reaction to the forex market.
The winning forex trader develops a simple strategy based on market configurations while the loser tries to predict the future while bogged down in a variety of unnecessary technical indicators!
- How do mothers make friends
- What is British Grime Music
- Why aren't there many small bridges?
- Is Chardonnay champagne why or why not
- Websites could kill the app
- What is the best attraction in Tampa
- What cars does Uber have in Mumbai
- Has the privilege of executive and legal status
- What does this sentence 9 mean?
- You can think while you are unconscious
- What is the diagnosis and treatment
- Which ion channels are responsible for epilepsy?
- Can you pay bills with counterfeit money
- How can I become more ruthless
- What's your rating of Moto X4
- How to use InterviewBit
- How do I love studying pharmacy?
- What is a Panel Beater Management Fee
- What made Ukraine lose Crimea?
- HVAC Is it illegal to mix refrigerants?
- What's like a Tesla
- Will state roads ever become highways?
- How long will India last against Pakistan
- Can you be a Christian and a Republican