SECRET TO PROSPEROUS CURRENCY TRADING
Traders, do you want to know the very secret to successful currency trading? Limit the downside. You may think it is as simple as cutting the losses off quickly and not letting the profits run. But there’s more to that.
The forex market, with daily transaction volume of more than $5 trillion, can be a trader’s formidable ally or foe. Being the world’s largest and most liquid market, most undercapitalized traders believe they may be outmatched as they trade with major central banks, hedge funds, investment banks, market makers, and their fellow currency traders. Therefore, curbing the losses is not easy. Losses are inevitable, but traders can do something to limit it. It all depends on the trader’s set of skills and ability to gain profits.
In most cases, when minimizing your losses, the right side of the chart may be the most difficult section to predict with any trace of preciseness. Those who are positioned correctly can manage their profits, while those who are going against the flow are either experiencing margin calls or pressing eject buttons. Investors, at least most of them, tend to panic and sell winning positions prematurely. One should instill disciplined indifference to P/L fluctuation, an adjustment for traders identifying opportunities to lock in winning trades.
Bolstering trading skills is not enough. Traders need to have a solid education, as well as support and encouragement. It is better if an investor has a sturdy support network, preferably a network of traders, they can rely on when struggling. They can also opt to retain the core principles namely trends, market structure, support, and resistance, and remove the imperfections that can dent the P/L curve.
It is imperative to determine what is and has been repeatedly seen in the market. An investor can come up with different ways to execute winning strategies and consistent trades. Those who triumph in the forex market focus more on the downside than the upside. Markets unveil lots of surprises, which affect trader most of the time. Keep your eyes on the downside and surpass it. Think of the upside as the market’s token of appreciation for being part of the trading arena.
Start all over again – no, cut the losses as abrupt as possible. That is the very secret to successful currency trading.
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