Posts Tagged ‘attitude’
Forex Trading Systems: The Right Mindset
August 4th, 2009
courtesy of pcremix.com
About 97% of all forex traders fail to grow their accounts over time, let alone make a living from trading. Even if the trader applies a very effective system in their trading, the key reason most traders fail is because of their trading attitude and mindset.
This is an obvious but important nugget of forex wisdom: You can’t predict where the price will go! Most traders trade with the attitude of trying to predict the direction of a trade. They will have that idea in mind and they will act according to what they think the price will move to. They then get prejudiced about the trade. Even if the trader claims to be trading their “system”, the action of trading now has a subconscious expectation.
A great piece of advice for trading is: Have faith on your forex trading system, and set your stop losses so that no more than 2% to 3% of your account is at risk at any one trade. Once a trade signal has been given according to your trading system, you simply forget about guessing the outcome of the trade. You then commit to it. Don’t get out of the position for fear of losing. The trade will either get stopped out or gain pips. Once the trade is triggered you simply let it be and let it go. You will have losing trades, it’s inevitable. If you let your winners run and make sure your stop losses are figured out, eventually your winners will recoup your losses from the stopped out trades. You have to learn how to simply accept the stop losses and be able to keep on placing trades when setups and signals occur.
Having this mindset will enable the trader to not pull out of trades prematurely, and it will also help the trader not rush into placing trades. The attitude is a type of “letting go”. Your job is to implement the trading system as accurately as possible, and be able to correctly interpret the indicators on your chart.
Other Great Tips and Habits to Develop
a) When you get 2 or 3 losing trades in a row, keep on trading the system until you get a winning trade., making sure to wait for the entry signals.
b) When you get a streak of 2 or 3 winning trades, stop. Winning opens you up to the dangers of over-trading.
c) Always wait 1 to 2 hours after winning a trade to place the next one.
Remember to keep your emotions in check, and realize that there are abundant opportunities during your trading day to get some pips!
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