I’ve known a Forex Expert who has over 10 years of Forex trading experience as proprietary trader at hedge fund asset management firm. I’ve asked him if I have to trade mindlessly to avoid margin call and I’ve organized his answers below:
Many traders think that they should enter a position mechanically and exit the same way. Whenever the trade doesn’t end well, they blame themselves thinking that the trade was not mechanical enough. What is a machine? It is designed to perform a specific series of action, and if it acts other than its designed program, it’s called defective. And why do we want to be a machine, again? What good do we get out in trying to become a machine that we cannot? It’s simply not logical to demand something that is not possible.
Forex market is not mechanical. It’s like a living organism that behaves in whimsical and volatile ways. You must try your best to become versatile and do the best to avoid becoming a mechanical Forex trader.
When you deal with a market that is shapeless and unpredictable in mechanical way, you cannot make profit in Forex market. Buying and selling is like a war. Real money is at stake and especially, it’s your money or someone else’s. People do not participate in a war in mechanical way.
Prior to joining the battle, you must set up the parameter and basic tactics. Objectives and supplies are crucial along with understanding the battleground. If your plan A does not work out, you must be swiftly change to plan B or regroup. If the high-in-command is stiff and rigid in changing the course of plan, the loss will be catastrophic and cannot be undone. It’s either a Forex margin call or a profit. It’s too late to call for a retreat when you realize that it’s devastating.
Do not buy and sell like a mindless machine. Being flexible and the ability to improvise is what differentiates us from a machine and it’s one of the greatest perks among so many disadvantage of being one. First understand the market and grow the habit of trading with strategy to find your best fit. Get to know the pros and cons of each strategies and find the usages. Be prepared in whatever behavior the market acts towards to play it by the ear. Swift judgment and recuperation is what defines a durable trader.
Above is a summary of my mentor who emphasized about the ability of improvisation to become a Forex Expert. Since we cannot pretend to be a machine, we should rather act volatile as much as the market fluctuating its trend and we do not want to become a mechanical Forex trader.