Unfortunately, many traders report to their desks with the burden of making a quota, or paying their rent. While many traders thrive under this kind of pressure, others will crack and force themselves to find or make opportunities, to trade, when there is none but sometimes the best trade is, no trade. Â
More Profits With 10% of the Work
A review of historical data will show that only a few really good trade opportunities present themselves each week, for any particular instrument. Unfortunately, these opportunities donât always show up when the trader is at his station. But a similar review of mleost trading records will also show that most unsuccessful traders would be profitable had they done only 10% of their regular trading activity. It is the desire to be active and productive that seems to coerce many traders to find a trading opportunity where none exist and in the process ruin their trading accounts.
Turn Your Fear Upon Itself
Working hard and achieving more is a mind-set that works well for life in general but is a principle that does not necessarily apply to forex trading. While good traders find it necessary to spend time learning the market dynamics and developing trading strategies, being too hasty to start trading is a formula for disaster. Trading is a most challenging art, and so, time must be spent to develop that art. While perfection is illusive in this sphere of life, making consistently good trades is quite achievable if the trader has the attitude and determination.
If the fear of not making a quota, or of missing an opportunity causes one to overtrade or prematurely enter the market, just remember, there is always a good trade to be had tomorrow. It is always better to wait on a good trade signal than to enter a low reward high-risk trade. It is the nature of the market to repeat itself; no matter how good the missed opportunity had looked, be assured that many more opportunities will come. Resolving not to trade until the right opportunity presents itself is the most powerful state of mind a trader can have. Invariably, this mindset will also keep the trader from making too many bad trades.
Back testing will show that the really good setups donât occur as often as one would like, as a mater of a fact, they are few and far between. So it is unreasonable to expect these opportunities to pop off the charts just at the time one sits down to trade. Disciplined traders develop the ability to wait for their preferred patterns and conditions before committing money to a trade. This approach does not completely eliminate the incidents of making bad trades but it will significantly reduce them.