They say trading is 90% psychological and 10% technique. You might know the best trading techniques but without proper mindset and attitude, you don’t stand a chance of making it big.
Trading is an endeavor that requires confidence. Confidence helps you focus on the essentials and fuels you to face uncertainties. On the flip side, having no confidence is destructive. When you suffer a series of losses, how will you rebound and focus without it?
It’s important that your trading techniques instill confidence in your trading. And in this article, we’ll talk about that one thing that could build up your trading confidence – TIMING.
As in comedy, timing is everything in trading. To truly appreciate this, here’s a perfect example.
On October 19, 1987, the global stock market experienced its greatest crash. Also known as Black Monday, stocks declined a harrowing 23% by the end of the day. It’s the largest one-day percentage drop in the stock market history. But around 1:30 p.m, a big rally occurred that pushed the Dow Jones and S&P 500 up by more than 10% before running out of steam and turning down to end the day on the lows.
Indeed, most traders lost that day. But those who bought 1:30 p.m and sold their positions an hour later were rewarded with some of the best short-term gains in stock market history.
What happened in Black Monday only proves that timing is your ally in trading. Of course, timing is hard to master, but here are a few tips to remember:
Stay on Top of Market News and Updates
The economic events of different countries have a big impact on their respective currencies. A Forex economic calendar will keep you up to date on the latest news and happenings around the global market. Some of the most important economic data you should focus on include Non-Farm Payrolls, unemployment rate, Purchasing Managers Index, and Consumer Price Index.
Plan Entry and Exit Points
Perhaps you’ve experienced putting on trades and immediately felt anxious that you entered way too early, or waited too long. The key here to have a solid technical analysis. Look for market trend patterns, make a plan out of it, and be sure to stick to it. For example, if you feel that the value of a currency pair will increase, don’t hesitate to enter into a trade.
Clearly, you need confidence in order to excel at trading. To have it, you need to learn to trade the markets with greater precision and timing. It’ll be a test at first, but following our tips above should be a good start.
Also see: Forex Market Timing: When Not to Trade
