The whole kit and caboodle.
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building a strategy that works.
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I think the entering and exiting trades can be challenging and crucial aspects of the trading success that is hardest in my opinion.
Making money
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making money must be easy.
if you think it is hard, quit trading.
professionals make money easily, simply by sticking to the plan and let the money and market work for them.
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Sorry, I wrote that in my sarcastic voice, you must have read it in my straight voice!
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The psychology of it. Second guessing your strategy and changing it, then wondering why it’s not working anymore. There’s a reason why there are so many books about the psychology of trading. You can learn all the candle patterns and strategies out there, but if you’re constantly falling prey to the psychological pitfalls like FOMO and revenge trading, none of the other knowledge will do you any good.
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Too many traders are obsessive about eliminating losers from their results. This is a difficult habit to shake as it starts all the way back in early school years, when the objective is of course to learn, remember and reproduce facts accurately: in school, failure in this means you made a mistake, and mistakes have to be eliminated. In trading there are no small mistakes.
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This is a very good point. With a positive risk-to-reward ratio even if you are losing half your trades, you’re still coming out ahead. And the more positive that risk-to-reward ratio the more losses you can have compared to wins and still be a successful trader. A 2-to-1 risk-to-reward ratio means you could have 2 losses for every win and still break even. (Yes, I understand that seems backwards, calling it risk-to-reward and then saying 2-to-1, but apparently everyone lists the actual reward number first, then the risk number, even though the term is the other direction. I know, I agree… it’s weird.)
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We need to re-define some of the most important concepts before/while trading.
For example, “being right”
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Fundamental analysis is the hardest part in trading because traders need to undertake the global market condition to take the pure view of the market.
For me, the most challenging aspect of trading is holding onto hope when a series of unsuccessful trades tests my patience and confidence.
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For me, the psychological one - constantly remembering to shift from the result of a single trade (be it a loser or a winner) to the global view.
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Knowing when price is in a retracement or complete reversal is difficult to pin point. I know to follow the trend direction and all and use Bollinger bands and 200 EMA etc… but I do occasionally get caught out. Also when take profit is at a round figure, then price stops and reverses a few pips off. I have learned to disregard the round figure take profit concept.
I was gonna say consistency… in everything (reading, learning, looking at charts, coming back to review losing trades, reading news, reading more education), then saw this.
I hate this. Happened so much to me. Maybe it’s part being greedy and thinking I deserve more, or just trying to stick some kind of R:R that’s at least 1:1 or better. I’ll watch my traders in profit, leave for a bit, come back, and profit has turned to loss.
Everything would seems like the hardest part if the basic core foundation of why does price moves in the first place is not solid yet.
That only applies if you are a fundamental trader. Technical analysts don’t usually use fundamental analysis, just price action, support and resistance levels, indicators and possibly automation as their tools
Having control over your emotions and avoid doing anything based on fear or greed.
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For me the most challenging aspect of trading is often pinpointing the perfect opportunity that aligns with the right trading method.