Your exact day by day trading plan is more about your position size, stop losses, close point for a successful trade, and so on. In this situation you do have a profit target, voiced vis the number of pips you will take if the trade is profitable. It’s not a brilliant idea to let trades drift, looking for unlimited profits. Some folks do only close out half of their position at a certain point, it is true, but if you’re intending to do that it should be a written part of your plan, not a snap call. Don’t carry your planned system in your head where you can simply be persuaded to change it. Foreign exchange trading is a stressful as well as a dodgy business, and having a well thought plan is vital to the success of your enterprise.
Posts Tagged ‘system’
This tip is probably the most valuable tip I can give. It’s all about psychology. You may think it’s not important, you may say give me a secret indicator that indicates trades with 100% certainty, but psychology place the major part in success of a trader.
Far too often traders let their emotions stand in the way. Risky trades, lust for fast profit, fear of losing it all, everything affects how successfully you trade. Traders aren’t robots and it’s our strength as well as a weakness. One one hand we can make intelligent decisions adapting to even the fastest changes in market, on the other hand our emotion is the greatest obstacle.
There’s only one solutions to this problem and it’s to develop a system. Create a strategy and follow it religiously. Only tweak it after you have the results not live trades. It may seem counterintuitive to leave a losing trade, but if your system requires to do so, do it. Then adjust. Granted you shouldn’t lose an account over that, but a good system wouldn’t allow that.
In any case, you have to cope with your emotions and become a robot when it comes to decision making.