In all my years of experience I have had, I had seen traders who had spent cooling their heels in front of currency charts, still commit ridiculous mistakes. It is simply because they forget the basics in the long run. When a greenhorn steps into the world of Forex trade, he comes armed with the basics to make the first move, and score winnings. However, in the course of time, he forgets them, at least till the time he keeps winning. And that is perhaps, one of the most common mistakes experienced traders do. They fail to keep the excitement in check, and thereby, become vulnerable in the spur of the moment.
What are these mistakes that need to be kept in check?
Traders who had earned over the course of time have a tendency to keep things simple. They have gained enough experience, faced losses and have learnt to overcome it. Experienced Forex traders have made significant winnings, and that is the reason they are still on it.
The real problem crops up when they start depending on the earnings from the trade. What began as a game culminates into dependence on a steady stream of Forex income. When they do that they become anxious, fear of losing creeps in and mistakes begun to take place, especially during the time when they lose.
It is necessary for traders to enjoy their trade even while they lose, and for them to do exactly that they need to take it easy. Anxiety and being too staid begets mistakes, similar to what greenhorns do.
Did you had a fight with your spouse on the breakfast table, and drove straight to work. Don’t make a move under the influence of stress. The best way, of course, is not to have a fight just before you start trading. Any emotional or a mental stress is unhealthy for Forex trading. You might have this belief and the confidence of an experienced trader, and you also believe that you are smart enough to carve your way out of all this. Remember, your trading skills are at the ebb, when under a stress.
Circumstances could change in your private front, and it might affect your trading. No matter how experienced and successful you had been, but to stay successful day in and day out is never easy. It is a combination of your character, and your ability to implement strategies successfully and consistently, that gets counted.
A personal financial loss on some other front could trigger a trading loss. Many Forex traders on the back of a personal financial loss turn to short term strategies as a precautionary measure. They follow this arrangement because they fear unexpected further loss.
Don’t behave like a novice just for the sake of trading. If you don’t have the resources to trade long term, avoid trading for a while till you are ready for at least a midterm plan. Don’t take decisions just because you had been successful and you think you have the courage to turn the tables. That will make you vulnerable.
By Rajiv Sighamony