“Events, circumstances, and experiences arise and pass away. Winning trades, losing trades, fear, greed, sadness, happiness, and eventually your own life. Everything is in constant flux. Learn to go through it with [the] stability of mind.” – Yvan Byeajee, Zero to Hero: How I went from being a losing trader to a consistently profitable one – a true story!
Forex Trading successfully consistently is arguably one of the most challenging things to succeed at. Essentially, traders work on probabilities to determine which way a currency pair’s price will move. Consequently, it is not easy making clear-cut, well-thought-out decisions with the high volume of uncertainties that present themselves on a daily basis.
However, it is worth persisting and practising until you succeed.
Additionally, because of the uncertain nature of Forex trading, it is vital to develop a strong sense of self and confidence. You also need to have the drive to succeed, no matter how difficult it gets. In other words, no matter how difficult it gets and how many losing trades you make, it is vital to pick yourself up, dust yourself off, and learn from the loss.
The Forex market is impacted by socio-economic and geopolitical events. No one makes winning trades 100% of the time. Thus, it is essential to remember that not all losing trades are as a result of wrong decisions.
Here are some tips to help you overcome both your reticence and fear of making losing trading decisions:
Practice makes perfect
Trading profitably consistently is a skill that is acquired through lots and lots of practice. Guessing, including what is traditionally known as “beginners luck” can (and does) only produce disastrous results in the long run. Learning the art and science of successful trading is not dissimilar to the journey that a professional sportsman has to take from a novice in his field to a highly-qualified professional.
Therefore, be structured and deliberate about how you practice. Study as much as you can about how to recognise favourable trading conditions. Examine your losing trades to learn from your mistakes. You will make them. However, it’s also important to remember that not all losing trades are as a result of incorrect trading decisions.
Fundamental and technical analysis
Both fundamental and technical analysis are crucial elements of online financial market trading. Without an understanding of both aspects and what their function is, you will battle to make the correct trading decisions. Here is a short definition of both terms to help you understand the difference between fundamental and technical analysis:
Investopedia.com defines fundamental analysis as “a method of evaluating [an asset] in an attempt to assess its intrinsic value, by examining related economic, financial, and other qualitative and quantitative factors.” Therefore, before you place a trade, you must look at the social-economic and geopolitical events that have happened and are about to occur because these will play a significant role in influencing a currency pair’s price movement.
Technical analysis, on the other hand, utilises statistical analysis tools such as candlestick charts, oscillators, and technical indicators to determine price movement trends.
Keep moving forward
As mentioned above, do not get disillusioned when you place a losing trade. Look at what you did, learn from it, and move on. Don’t dwell on the losing trades. Forex trading is not easy, but it is worth persevering.
Similarly, when you place profitable trades, look at what you did and repeat it.
Remember, don’t trade on emotions. Think and plan your strategy carefully before you open a trading position. The fast-moving nature of the Forex market makes it easy to make snap decisions. Unfortunately, these trades will more than likely turn out to be losing trades.