If we are honest with ourselves, most of us have many occasions when we have missed out on what might have been golden opportunities in our lives. The girl we should have asked to dance, the job we should have applied for, the sports tickets we should have bought. Those who are involved in Forex trading soon find that what happens in life as a whole happens in trading too – because as we keep finding out, traders are human after all! So why does it happen?
One of the reasons that people don’t go for perfectly good trades is that they are lacking in self-confidence in their abilities. Especially as a beginner, you may look at something which might seem obvious to a more experienced hand, they worry and ask themselves whether it’s right or wrong, and because all the signs seem so good, they distrust them and opt out.
Another “beginner’s issue” comes in the transition period from the months of preparation when they prepare for trading by working on a dummy basis without going live. At that time all risks could have been accepted because they weren’t “real” risks at all – no money was going to change hands. Now in a real situation, emotion comes flooding in and the rules and principles that you were sticking to in training tend to vanish. Only experience (and learning from it!) is a cure for that.
Trading is about confidence. Imagine a scenario where there were lots of quite good and acceptable trades which for one reason or other you decided not to take. Then another very similar one arrives, which you do trade, and that one doesn’t work out and you lose money. Confidence is shattered and you stay shy of the next opportunity – which, would you believe, ends up as a winner. This gets you into a totally non-productive vicious circle, frustration galore and the end result is bad trades (in an effort to take revenge on the system) and even less profitability.
No nobody can foresee the future but if you spend too much time analyzing where you would be after you made the trade –being wary of entering into a trade unless you feel sure of the outcome. Again you miss out on a good trade. The best antidote to thisis to go back to dummy trading and try the trade out in real time to have a better idea of the outcome. After that do it for real.
We said before that confidence is the key to everything. The sensible trader knows that no one wins every time and that you must aim to come out top more often than not. Obviously, especially if you are in the early stages of your career as a trader, you need to be careful with your money and not let enthusiasm (or fear) run away with you. But take a broad, medium term view and combine reasonable risk with justifiable caution. All should then be well.