Do you want to know the real reason why most Forex newbie traders career end prematurely?
Overtrading most newbie Forex Traders does not know that, now you are amongst those lucky few privileged Forex traders who know this and I highly recommend that, from now on going forward to use it as your trading edge.
in order to become profitable forex traders, one of the simple tools they can use is not to over trade.
In fact over trading is responsible for wiping out majority of wannabe currency traders, trading accounts.
A simple knowledge like knowing when not to trade is very important for your online trading success.
When not to trade?
Now let me give you some of the scenarios whereby you should not trade:
If you have 5 consecutive, loses in a day or week.
If you have a 5 to 8 consecutive loses, then it is advisable to take the rest of the week off, until the following week.
This will not only save your trading capital but also give you enough time to recharge your batteries, and when you come back the following week you will be a rational trader instead of being an emotional one.
Overtrading the forex market is a very expensive exercise because you will not had to pay your broker too much money in the form of trading spreads, but you will become a victim of the two greatest evils, associated with trading which are Fear and Greed.
The dangers of over trading any stock market, is not only one of those amateurish mistakes made by new traders but even experience traders, who are under tremendous pressure, to reach their monthly targets also do the same.
Now one of the simply things to do in order to avoid falling in to the trap of over trading are to set some simple rules like:
- How much money do you want to make per week?
Professional Traders do it all the time, and I personally does not see any reason why, you too can`t do it. Trading is not like gambling but more about taking some educated guesses, whereby you need to know how much pips are you prepared to make out of your trading, before you call it a day.
How much pips are you prepared to lose per trade?
As discussed earlier, it is better to trade with a complete trading strategy, which will tell you help you to sleep well during the night knowing in advance how many pips you will make if the trade goes against you, or for you. This will not only help you to become a discipline trader but, it will make you to have confidence in your trading system.
- What is the maximum number of trades, you had to open per day?
Overtrading, is one of those killers which is responsible to bringing the trading careers of majority of, newbie traders to an end, before it even gives them the kind of positive results they were hoping for.
One of those effective strategies you can use to avoid excessive trading is to include as part of your trading strategy the number of trades you are prepared to take in a day, week or a month depending on the kind of trader you are.
- What are those things, happening in your personal live, preventing you not to trade?
Even your personal life, which has nothing to do with trading at all, may affect your trading results.
Fear of losing the your trading capital, happen even to people who have been trading the markets for some time, but still it does not prevent them from pulling their trigger and open those trades, as per their trading system.
Now if you are emotional, you will not think rational especially after some big loses and therefore it is highly advisable to take the rest of the week off and come back the following week, in order to give yourself time to think rationally while also saving your trading capital.
Now that you know why majority of traders struggle in this dog eat dog trading business called forex trading, I highly recommend that you learn from their mistakes and give yourself a trading edge and stop overtrading and some of the above mentioned mistakes I mentioned in this article in order to help you become a better, disciplined as well as a profitable forex, commodity or even a stock market trader.
Thank you again for visiting my Blog!
From: Patrick Sekhoto