Five Forex Trading Mindset Errors
Going into the forex business requires careful preparation. Starting from the science of trading to the background and market psychology. Both an experienced trader and a newbie trader often make mistakes. Even mindset errors are often experienced by beginner traders. Many myths about forex have the potential to affect anyone, no matter how long the trader is in this business.
There are five mistakes of the forex trading mindset that are influenced by myths, or myths that form the mindset (mindset) of forex traders.
The first is an advertisement or marketing sentence that says forex trading can make rich quick. Finally, many retail traders are looking for this quick way of kayaking through forex. Unfortunately, this rich quick event is very rare.
Trading requires patience and no ultimate goal. There are many traders who go because they feel like a failure, not making money. Then back again after some time disappeared for trading again. Therefore, it takes consistency in trading, not just the gambling mentality. Lose go, come tomorrow.
Forex Trading is Only for the Short Term
Second is forex trading is for short-term traders. Indeed, high leverage makes forex trading in the short term increasingly popular. But this way should not apply to everyone. Beginning retail traders usually get stuck in the wrong mindset.
Trading using long-term trends can be more profitable. The long-term trend of a currency is always driven by fundamental factors so that traders can know the tendency of the direction of the price movement of a currency. Technically, long-term traders focus on bigger trends and do not care about the daily movement. The long term here is not intraday (maybe weekly or monthly).
It can be said that taking long-term timeframes may be beneficial for some trades as it will reduce the number of spreads paid (commission equivalent) and traders are better able to avoid short-run trading fluctuations. In addition, the currency can also be used as an investment to diversify or protect the buy-and-hold portfolio.
The third is to look for reasons when a trading error or loss occurs. It is often heard that a trader who has just experienced a loss feels he or she is being cheated or the broker is manipulating as a reason for his failure. Although the assumption is easy to make, forex is not a scam. The forex market is by far the largest in the world, driven in the volatility of hundreds of thousands or even millions more deals daily. Smart traders will think otherwise. Because of the nature of the forex market that is so. No need to look for reasons for losses that are or are happening and immediately do anticipation so that no bigger losses occur.
Always Right All the Time
Fourth is to feel right all the time. Trading in the forex market sometimes can happen loss. Any trading position is possible to lose first and turn circumstances into profitable. Or lead to losses. Market conditions are not always the same so the right strategy but not adapt to current market conditions, potentially lead to losses.
Be able to accept losses (admit mistakes) and find strategies that provide little protection under current market conditions, good enough to bring positive results.
Follow What Others Do
Last or Fifth is a novice trader following what others are doing. In this global and digital era, often encountered marketing and promotion sentences that there is the success of a trader who is able to reap hundreds of percent profit in a matter of hours or minutes. Yes, maybe that person could. But not necessarily with a pre-trader beginner.
There are always many suggestions and recommendations given on how to trade, what to trade and when to trade. In the end, however, the trader will risk his own money. Fortunately or loss is owned by the trader. Therefore, since trader money is at risk, they should try to develop their own skills (make trading plans, read trends and execute trading) and all trading decisions based on their own conclusions and not purely on the advice of others.
Well, out of the five forex trading mindset mistakes that have been spelled out in two articles, which one is on your mindset?