BUY FXO Forum Shares
1316
Shares in the BANK:
We BuyWe Sell
$1.7638$1.8183
Results 1 to 3 of 3

Thread: Currency Day Trading: My 5 Biggest Mistakes

  1. #1
    In Profit
    Join Date
    Jul 2007
    Posts
    108
    FXO Shares
    0
    FXO Bonus
    0.000
    Thanks
    0
    Thanked 0 Times in 0 Posts

    Default Currency Day Trading: My 5 Biggest Mistakes

    Currency day trading is 90% mental! I had heard this from many professional traders but when you start as a novice in the Forex world you can fail to realize the significance of that statement.

    Of course, it is necessary to develop analysis skills using a variety of technical indicators. Risk management and understanding of the market is also crucial if anyone is to succeed at currency day trading.

    But the greatest challenge of all is developing mental discipline and emotional control. After many months of practicing in a demo account and testing the water cautiously with a few hundred dollars in a mini account, I studied my main trading faults and documented them.

    Here are my 5 biggest mistakes. Perhaps you can learn from them too!

    1. ANXIETY & DESPERATION - LEARN TO RELAX!

    Feeling a compulsion to trade - its poison!

    If good opportunities were missed the day before, or if one or two days have been quiet with no trades, then you need to carefully monitor your emotional and mental state.

    If feelings of desperation begin to rise take a step back and enforce strict mental discipline - keep to your strategy, only look for safe trades, wait for the right setup!

    2. IMPATIENCE - LEARN TO WAIT!

    How many times do we enter trades prematurely? Wait until the setup really sets up!

    Don't be afraid of losing an initial big run because:


    Its not worth the risk

    There will always be another opportunity

    Catch the next retrace when it is much safer
    3. LOSING CONCENTRATION AFTER A LOSS - KEEP FOCUSED

    There is a danger after a losing trade to either:


    Shut the mind down so you become closed to further opportunities that day

    Act in desperation by impetuously entering an ill-thought out trade soon after to try and regain losses
    After a losing trade muster up all your mental resources and detach yourself from it. Imagine standing on a chair and shouting at the top of your voice: "NEXT!"

  2. #2
    In Profit
    Join Date
    Jul 2007
    Posts
    108
    FXO Shares
    0
    FXO Bonus
    0.000
    Thanks
    0
    Thanked 0 Times in 0 Posts

    Default

    4. THE MENTAL RUT - BE READY TO SWITCH DIRECTION

    If price goes opposite to what your initial analysis told you, look at charts with new eyes following the direction of price.

    It can help to maximize a chart on your screen and look at it from across the other side of the room. Get your mind out of the one direction rut and look at the chart afresh looking for new opportunities in the new direction.

    5. FAILING TO TAKE REASONABLE PROFITS

    How many times I have been looking at a profit of 20 to 25 pips on the screen only to see it evaporate before my eyes because I was hoping for a big move and decided to hold on.

    Currency day trading by nature revolves around smaller price movements. Often price will get to 20 or 25 pips and then retrace. It may then resume its direction or it may not.

    I have learned it is important to take the first profit early, and then let an additional lot or position(s) run to a more ambitious profit target. At the same time as taking out the first early profit, the stop is moved to protect the remaining positions.

    I used to put myself through much mental anguish from failing to take a 20 or 25 pip profit. Price would come back to perhaps 5 or 3 or 2 pips and now your emotions come rushing in regretting you didn't take the profit that was offered to you and hoping against hope price will return and even go on further for the big one!

    Save yourself a lot of mental exhaustion by taking a reasonable profit early after examining the charts to see where the first major level of support or resistance is likely to be.

    Identify And Act

    I have heard it said many times that currency day trading is more an art than a science. Each individual interprets the charts according to their own perception. There are no rigid, hard and fast rules. Having said that, a solid currency day trading strategy is necessary obviously.

    However, it must be backed up by strict mental discipline and control over emotions. See if you identify with any of my 5 biggest mistakes listed above and take the appropriate action!

  3. #3
    In Profit
    Join Date
    Jul 2007
    Posts
    108
    FXO Shares
    0
    FXO Bonus
    0.000
    Thanks
    0
    Thanked 0 Times in 0 Posts

    Default

    As a new trader..
    Maybe LEARN TO RELAX and LEARN TO wait that is important for us.
    Am I right?
    hehe.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
Disclaimer
2005-2016 © FXOpen All rights reserved. Various trademarks held by their respective owners.

Risk Warning:: Trading on the Forex market involves substantial risks, including complete possible loss of funds and other losses and is not suitable for all members. Clients should make an independent judgment as to whether trading is appropriate for them in the light of their financial condition, investment experience, risk tolerance and other factors.

FXOpen Markets Limited, a company duly registered in Nevis under the company No. C 42235. FXOpen is a member of The Financial Commission.

FXOpen AU Pty Ltd., a company authorised and regulated by the Australian Securities & Investments Commission (ASIC). AFSL 412871ABN 61 143 678 719.

FXOpen Ltd. a company registered in England and Wales under company number 07273392 and is authorised and regulated by the Financial Conduct Authority (previously, the Financial Services Authority) under FCA firm reference number 579202.

FXOpen does not provide services for United States residents.

Join us