Mark Strategies to Become A Good Trader Fast
Develop a feel for the market
You can imbibe most of the intricacies of trading and tricks of the Forex markets only through repeated application. Dedication to a consistent thought process based on real life experience paves the foundation for building the buying and selling process psychology.
Just as in any real world situation, only people who ‘get their hands dirty’, get to understand all the ‘ins’ and ‘outs’. They know when to stop and when to run. You have to keep a firm control on your emotions as also on your trades. Unlike a mechanical trading process using robots, the wise trader has a ‘feel’ for the market. This ‘feel’ he develops over time.
Rule the heart and rule the market
Many people who venture into trading in the Forex market do not make much headway. In fact, many of them lose lots of money. Simple reason for this is the way they approach their trading. They have a need to make money instead of patiently letting the money happen. They are trading with their heart instead of using their head.
Most of them also have very unrealistic dreams about the money they will make. They dream of making $120,000 from a seed capital of $1,200. They think that they will grow rich within two weeks. They want the apple to fall on their heads within hours of planting a seed. And when they find that they are not winning, they accumulate pressure on themselves. This makes them emotional and they begin to make bad trades.
Compartmentalize your emotions first
To understand the way emotions play a role, one must look at the various individual standpoints of each emotion.
Self-indulgence: Greed ruins everything you touch. Bulls win or Bears win but Pigs will certainly be sacrificed. Pigs renowned for their greed have no standing in the market zone. You can see more than one manifestation of greed among traders. For instance, one greedy trader will refuse to take profit dreaming that his favorable position will continue forever. Yet another will add a position the minute the market moves in his favor. While adding positions is logical when they are price based, doing so only because the market has moved in their favor is pure greed.
Excitement: Once a trader gets a couple of winners, he gets overconfident. The happy euphoric feeling dominates his actions and invariably he stumbles and falls. The feeling becomes dominant when the trader nets a big winner usually. Those who net 4 or 5 winners in a row are reluctant to let go.
Retribution: Though the sense of ‘wanting to get even’ is a dominant human feeling, the trader must realize that the market will not be dominated by a single individual and his emotions. Revenge will be topmost in the mind of the losing trader but he must remember that emotional trading will not produce any gain.
Fright: Fear is also a major player in the market. People who enter the trading zone for the first time will develop some fear, mostly that of the unknown. Fear blocks out the ‘feel’ for the market that makes a trader successful. Fear sometimes occurs when a trader encounters a sudden loss. To master fear, you must limit your transactions to amounts that you are capable of handling.
Develop into a complete trading expert
Trading strategy depends entirely on good education about various market behavior and the movements one can expect when the situation changes. Forex trading without proper control of your emotions is likely to send your hard earned money down the drain. Keep a firm check on your actions and avoid over-trading. Use a trading journal along with your trading plan to become an organized trader fast.
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