[B] When one falls into a pit he becomes a warning to others[/B]
We should stop deceiving ourselves (many people want to hear that they’re right even when the reality proves otherwise). It isn’t good to trade in the wrong market direction, especially when the primary trend is against us. When there is a vivid downtrend on the chart, it can only mean one thing: the price is skydiving. What is the best direction to take when the price is falling? On December 31, 2008, the USDCHF closed at 1.0669, whereas it closed at 0.9146 on December 31, 2012. Imagine what could’ve happened to someone who refused to close his long position or sought only long trades since 2008? Do you buy when your model signifies a ‘sell?’ Do you sell when your model signifies a ‘buy?’ Can you imagine how many pips the USDCHF has lost since the year 2008? There’s no bad thing with a downtrend, on the condition that traders accept that a market is weak and speculate accordingly. We make money in bear markets only when we sell short.
And who is “we”? Your commentary is appropriate for some traders; but there are others that use short-term technicals to counter trend trade. Blanket statements don’t work in the forex market because everyone has their own ideology and strategy for successful trading. I get what you’re saying “trading with the trend is a good idea”; and I agree. To suggest that everyone needs to do it is not only silly but a bit ignorant of how vast the scope of forex actually is.
Experience is the best teacher. Negativity in trading is compared to temporary setbacks in real life: it exists so that you can become a better trader. Losing streaks are equivalent of transient disappointments that celebrities face in their careers. They simply enable you to become an efficient risk manager. There are many life examples that can be compared to trading. Do you know that you need to be determined enough to surmount any challenges you might encounter in the markets? Uncertainty will forever be our source of wealth! Do you know that you need to believe in yourself? You’re never doomed to failure in the markets. You just need to work hard enough until you reach the stage of trading effortlessly (after your past errors have turned you into a general of the financial markets). Can you do this? Do you agree with me? If you can, your dreams would be achieved ultimately.
It’s common for many seemingly indigent people to be jealous, envious, livid, and become forlorn when they read how seriously affluent some are. You’re not really forlorn as you thought – only that you let great opportunities pass under your nose without capitalizing on them. There are many great opportunities in trading, but you don’t want to be a trader because you know some people are losing, and because those who’re not interest in trading have told you not to do it. You see, they aren’t doing it, and they’re telling you not to do it (simply because they lack the knowledge that can really make them winners in the markets). Some people don’t want to do it, while some do it in the face of recalcitrant hurdles and obstructions. When those who push ahead in spite of the challenges end up attaining financial freedom, then others would begin to be jealous, envious, livid, and would feel forlorn. Whereas those who’ve become rich as traders have done what you didn’t want to do: they risked their heads, necks sweats, and socks. Now, they are rich, and you’re furious and envious.
It is not enough to get the best strategy because they are not 100% profitable. What happens when a good strategy fails. DO you quit? No, you find another one and move on. Your ability to move with the market trend is what makes one a good trader
Why aren’t we patient while trading? Why do we prefer instant results always? We’ve become an immediate gratification culture, and we expect profits to come quickly, efficiently in the way we want. When that doesn’t happen, we tend to become increasingly frustrated and irritable - a sign of impatience. One source says that, for one thing, in trading, impatience is linked to frustration, irritation, and even anger. Such emotions can raise our stress level, which in turn can harm our health. Impatient isn’t harmful only in trading, it’s also harmful in other areas of life.
Yes yes yes! So true Wizard. One of the best pieces of advice I ever received about Forex comes from Mark Douglas, who says "be rigid in your rules and flexible in your expectations.” You have to be like water as Bruce Lee would say.
Thank you for this comment. You see, it’ll be difficult for traders to trade successfully unless they do it like a machine. Which means, putting their emotions under control. There are ways of achieving this.
It’s common that certain traders don’t consider exotic pair and crosses when they trade, because they’re not as popular as majors and because their spreads aren’t tight as those of majors. Should you trade on an instrument with a higher spread when the spread on the GBPUSD is much lower? Why would you trade the GBPCFH when the EURUSD is readily available? Some think that low spreads matter and that high spreads could magnify losses and reduce gains. This is true. But there are many wonderful opportunities on those exotic crosses as well, especially if you’re using a trend-following strategy. If the GBPNZD moves by more than 500 pips in one week, would it matter much if the spread on it is 20 pips?
The idea of trading itself is the best and for the best trading ideas i would suggest that one should gather the forex market related knowledge and get a working strategy.
Depends on your strategy really. If you are holding trades open for days, aiming for hundreds of pips then 5-10 really don’t matter for a spread. But a lot of people aim for shorter time-frames. If you’re a scalper looking to make a couple dozen trades in a day then it becomes a more significant point. I look for Price Action set ups on about two dozen pairs personally.
Just saying.