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Sunday, March 31, 2013

Dare to Try FX 2



Trading FX is not easy? NOT AT ALL.  The one that is not easy is trading successfully, because trading involves emotion. So, let discuss on How to take off this emotion, minimize the losses, and dare to gain without fear in all kind of trading especially Forex.

Emotion will always emerge before during or even after trading, that is why fear mostly arise within us and with very high chances to cause to a poor trade. It is not that we cannot afford losses; just most of us don’t like to. That is why we should counter such fear, and eliminate such weakness in us.

It seem to be a good test to know more about one selves trough trading, as one can clearly see their real strength and real weakness as compare to their normal life, because one can hide it from others and people may not know it, but in trading, one hardly lie to themselves as results tell everything.

Fear, which mostly lead someone to hold off a trade at certain situation before real profit or predetermined stop losses happen. So, do you think this act is good or bad? Hmm, the good part is you may said you avoid having a losing trade, but to others, it may be a miss out opportunity in a potential winning trade as according to their earlier plan. This is a very subjective questions and it depends on how everyone deals with it with their own ability. However we like more to talk about allowing minimum losses in order to gain a lot when chances appear. So remember these 2 things, your tolerance risk, and time frame in holding the trade. If you can deal with these efficiently, you may more often to offset the fear above. 

If you expect massive pips gained, normally it takes longer time frame, and vice versa if you expect a small one. So double confirm your reason whenever you start to place a trade, I mean once you know what chances is available to you, your tolerance risk and your money management.  Carefully use the leverage that is given, risk reward ratio should be 1:1 or 1:2 or more that sound reasonable.
Let keep it simple,  trade small if you cannot endure high volatility , allow some drawdown or cut loss point, e.g. (50pips) , that enabling you to have more rooms to hit your profit targets e.g.(50 /100/++ pips). This is important, because you won’t easily fall into the trap of making premature exit, as uncertainty move always happened during the trade. By this, you can take away your fear, which may cause you making any irrational and emotional decision.

Remember, trading involved risk, you must dare to gain as well as dare to lose, don’t act Pro like setting an objective to not allow at all a losing trade. Please don’t do this, such act is normally a short term behavior, trading should be a longer term activity. I don’t think Warren Buffett simple rules, ‘don’t lose your money’, applied to such short term behavior. However, one can maximize their winning trade and minimize their losing trade through more study, homework done,or proper technical analysis skill etc. Just protect your trading capital well and keep on moving with a reasonable tolerance risk to fight for potential gain.

Don’t simply go beyond your limits, as it will stress you out and you will most likely lose control and cause you to bust out your trading account very easily if you always let fear interrupt you and trade emotionally. Just be true to yourselves, minimize your weakness if there is any, and improve the games gradually, you will be definitely a successful trader in long run. Be Passion to what you do. Consistent in discipline trading execution, achieving  persistent great result.

Happy Trading by facewee


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