Situations When You Must Avoid Trading In Forex Market
For the newbie trader, there is nothing worse than being unsure about the situation. Developing a negative perspective can prove useful because you will only make a move when things are absolutely positive. Learn the times and instances that tell you do not trade now – it will save time, effort and money for you.
Let us go over the situations you must avoid trading in Forex Market one by one.
- Being unsure about the trade strategy to adopt
If the situation arises such that it does not present a clear trading plan (at least as far as you are concerned) then it is better to stop. Take a step that you have planned and are ready to execute – always! The market is much too big to fool around.
- Getting an emotional attachment to the trade
Turning effort into success depends only on one thing – having the ability to remain aloof from the money and the trade. The minute you become involved you lose hold of your decision making capacity. If you are an emotional trader, you will not survive for long.
- Best trading hours
Though trade goes on throughout the day, every trader has certain periods when the decisions he makes will show profit. Initially, determining this period may require you to sit through the trading sessions for an entire day, every day. Gradually you begin to realize that the profits are only showing at certain times of the trading session.
- Limit the number of open trades
For sure, one must have several trades open. But when you begin to lose track of the trades you have already started, you can stop opening new trades. Though this seems elementary, this is the simplest and most widespread reason why newbie traders lose money.
- Quit your losing trades
Market will sometimes run in a new direction. This is not the time to wait and see but the time to cut your losses and run. Keep only those trades that show positive alignment with the position you have chosen. This will make your trade steady and predictable.
Prepare your strategy – the action plan for all contingencies so that you are thinking clearly when the trade has commenced. If by chance you are not up to the situation, quit immediately! Go back and prepare your plan. Align the action in a cohesive and easily executable manner. And if you have not, then it is better to avoid trading in the Forex market for a while.