You are confident to trade. If you do not have a good level of confidence, you will not be able to make a profit in trading. The confidence level is better when you can profit consistently. But never become overconfident. Overconfidence is detrimental to trading. It is better to be as confident as possible. I have been trading in the Forex market for a long time, I am never overconfident and whenever I see that I am overconfident, I meditate and control my overconfident. To increase confidence, you need to make a consistent profit and you need to know how to do good analysis.
Hmm confidence can get you into a real load of hurt in trading.
It can make you take trades you shouldnt.
Make you ignore using stops.
It can make you believe you are right and the market is wrong.
Confidence in trading is overrated.
What you NEED to do is realise just how little you know and so tread cautiously.
You also need to develop a belief that technical analysis actually works. Many of us find it hard to believe by a drawing a few squiggly lines on charts we can make money.
This is what makes us second guess our trades.
This will only come with screen time, and you could even perform lots of back testing to enhance your faith in the subject
As far as confidence goes, you should be developing it in yourself - not specifically about the market.
There are so many programs or books out there to help.
Confidence DOES matter - particularly when your in a trading hole. Those who have self belief know they are capable of coming out of a trading slump, those who lack confidence fear they cannot.
But this is self confidence not trading confidence there is a difference.
I still fear losing every trade, it never leaves.
If you learn something and do trading, the result will be much better. Not learning to trade can cost you valuable money. If you learn everything and trade, your confidence will increase a lot. I get a lot of confidence when I consistently profit. But you can never be overconfident. A good analysis is needed to create confidence. Forex Trading Opportunity Market. If you are not a little confidence in this market, you will not be able to make a profit.
In trading, practical knowledge is far more important than any theoterical knowledge. It is completely natural to not feel confident about one’s market analysis and the confidence comes with time and a lot of practice. But the thing that could help you is to have a fair share of the trading instrument that you are trading and reach out to the news and expert analysis for that trade.
In trading, practical knowledge is far more important than any theoterical knowledge. It is completely natural to not feel confident about one’s market analysis and the confidence comes with time and a lot of practice. But the thing that could help you is to have a fair share of the trading instrument that you are trading and reach out to the news and expert analysis for that trade.
Hi Emmdy
You might want to consider a systematic approach to trading such as a well worn method applied by many successful Fund Managers (eg. diversified systematic trend following). This can be successfully applied to Forex and CFDs…but capital limitations and regulatory restrictions to leverage can be a restriction to diversification objectives.
There is a fairly steep learning curve here, but there are numerous free resources available via some excellent podcasts on systematic trading that can give guidance on how to achieve this.
One of the key ideas you need to accept is that to trade for the long term, you need to adopt realistic expectations and avoid the propensity to unduly leverage your returns in the hopes of obtaining a quick profit. Your trading success is ultimately dictated by the market. No trading system is profitable across all market regimes, so your success is not simply a function of your profits, but perhaps more importantly your career will be decided by your losses. Risk management is an essential prerequisite for survival and profits are simply an outcome of your risk management processes.
Robustness and survivability is an essential prerequisite for a long term career in this game. The market is extremely efficient and the validated long term track records of the best professional fund managers in the world is your guide to restricting your expectations to fall within realistic expectations.
Compounding is the way to achieve long term wealth and the systems you deploy are merely the method to achieve the best compounded returns with the least overall risk exposure. A crippling drawdown or account blow ups are devastating to ambitions of compounded returns (geometric returns)…so to avoid going down that path, take heed of the successful methods deployed by professional fund managers with a long term validated track record.
You will not find many discretionary traders with a track record of 30 years plus in this trading game. The vast majority of survivors are those that have adopted systematic diversified processes that are adaptive in nature.
Below is a simple set of systematic trend following systems applied to EURUSD over the last 40 years. There are 4 scenarios using the same portfolio of systems with different % risk allocations to reflect different levels of leverage.
You will notice that as your leverage increases, the risk adjusted return represented by ratios such as the Return/Drawdown ratio or the Calmar ratio significantly deteriorate. This is the negative impact that leverage has on compounded returns.
Many traders would like to lever up their returns to meet their profit objectives, but the problem with leverage is that it accentuates the volatility of the equity curve leading to lower compounded returns over the long term.
Ideally you are after a sweetspot where your risk adjusted returns are maximised to achieve the best ‘geometric returns’ you can achieve for wealth building. You therefore need to increase your diversification to include additional non-correlated returns streams in your portfolio that achieve the optimal risk adjusted return result…and hence the biggest bang for buck with your finite trading capital.
To be able to survive over a long trading career it is critical that you understand concepts such as ‘risk adjusted return’ otherwise it is exceedingly likely you won’t survive for more than what ‘luck’ can allow for.
Yes agreed, no point in reading and generalizing things in mind, you have to do consistent practice on demo account and on live trading.
Focus on the process: learn, trade, sleep, repeat!
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The reason I think you don’t have the confidence is because of lack of research and strategy. If you need to build more confidence, try opening a demo account although it’s always suggested for newbies but someone who is lacking confidence could benefit a lot as well
I advise you to first work on demo accounts, follow your results. In addition, I believe that there is also a reflection of ordinary life. If in life a person is not sure of himself, in life it will be exactly the same.
I believe that your lack of confidence is due to the fact that you don’t analyse your past experience. You’ve got to learn which factors influence the price and which indicators can give you useful information. I do recommend making a trading jornal where you can track down your decisions and the factors which made you make those decisions. You’ll have to analyse this journal regularly and make some conclusions.
I am sorry you feel this way but rest assured that you are not the only trader that goes thorugh a hard time. We all go through it as forex trading is quite demanding if you take it seriously. I suggest you slow down a bit in terms of your emotions and try to focus more. There is a lot to be gained if you devote time to reading, understanding and analysing. Keep a trading journal, and learn from your mistakes.
From my own experience, I can say that confidence in trading comes only with experience. Without this, it will be really difficult for a trader to get the desired result, even if desired.
I agree that practical knowledge in trading must always prevail in theoritical ones, however we shouldn’t underestimate theoretical knowledge mainly beause it learns every beginner lots of fundamental things such as notions, patterns, indicators and stuff like that. Otherwise, traders must pay attention more trading on demo than learning some stuff in the internet. I tend to suppose that only by practicing it’s possible to reach success in this activity. Moreover, some traders simultaneosly watch videos in the internet and trade on demo. Also, novices have to know that they shouldn’t stay on demo more than 2-3 months.
Also confidence comes from taking the responsibility that even if you made some decisions which led to losses, it is still alright. Trust your trading plan and review it time to time.
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Agreed. I would recommend in making a good trading strategy that allows you to keep making trading more consistency in term of profit. That way, you would feel more confident and trust in your gut feelings for being to able to execute the right trading plan.
I think the best way to build confidence is to trade and to learn from your mistakes. Figure out what you did wrong, and then strive not to repeat that.
It seems to me that in order for you to have confidence in trading, you need experience and knowledge, that’s all.
Yea, that is pretty much the base if you are planning to start trading. You need the knowledge in order to be able to trade with confidence.
Confidence is built through repitition and gathering a large data set that suggests your edge is in fact there. If it is, and you are strict with your entry and exits per your plan then the long term result should be the same as was found in your data set.