There are very few things in life that we can control completely by ourselves. We can drive safely but can be run over by reckless drivers on the opposite lane. We can study hard for exams and still fail. The same applies to Forex trading. We might think that we are in control of our forex trading, but the reality is, forex traders have very little control when playing forex. It’s all just an illusion of trading.
Let’s look at some of the following tips so you do not get caught in the illusion of trading:
Focus on what you can control
Even an inexperienced trader must know that the market can move randomly at any given time. There may be sudden headlines that cause the market to move dramatically without warning. Likewise, sudden market movements can be reversed without warning. There is little that can be done by every trader regarding this example. What we can do is focus on what we can control.
There are only a few things that you fully control when trading. We will describe it for you here so that you can improve your trading strategy and risk management in a better way. Thus, you can control the illusion of trading that disturb you.
Time in and out of the forex market
One of the most obvious is when you enter or exit the forex market. No one requires you to keep an open trading position at any time all the time.
If you find that the market is very difficult to read or understand, stay out of the market. After all, there is no point in risking money in a scenario where you don’t know which direction you should trade. And this you can control completely.
Stop loss
According to Investopedia, A stop-loss is designed to limit an investor’s loss on a security position. You are the only one who can decide where the stop loss should be placed, and whether it is still valid or not. By sticking to your stop loss level, you can eliminate a lot of losses when trading. After all, stop loss doesn’t necessarily fail, you know that trading isn’t always as planned as it should be. At that point, you realize that it’s better to cut your losses and fight another chance.
Receive profit orders
To take profit is something that a trader can control even after they enter the market. If you have a level that you think the market will target, and you have a profit order there, you can let the trade go up.
Unfortunately, too many of us worry about a market that will retreat after we start making a small profit, which is human behavior. The fear of losing, especially when it can happen so quickly. If you stick to your profit target and don’t let your mind convince you to change it, you are expected to make more profit than if you sell before you reach the target.
Psychology of trading
Let’s be realistic – it’s hard to control what you think or feel. Nevertheless, we want to think that with proper practice we can control our trading psychology for our main benefits.
Your conscience will likely try to convince you to make changes to your order or trading strategy in hopes of achieving better results. But one of the most important ways to control your trading is not to let your inner voice clutter your settings.
Forex trading, in our opinion, must be scientific, not based on emotions or other psychological influences. Take the time to learn about trading psychology and teach yourself how to reject voices that tell you to abandon your proven strategy.
Learn to accept what you cannot control
There are also many things that we cannot control, and it is important to accept these things as part of the trading process. You cannot control economic news. You can’t control how the market reacts to news events – sometimes things move exactly the opposite of what you expect.
Likewise, even with the most sophisticated charting tools, the market can move unexpectedly. Forex trading, like all forms of investment, must be based on knowledge, but this is not an exact science.
