Even with a well prepared trading plan, most forex traders can’t seem to get their bearings and generate consistent profits from their trades. Making those all those all seemingly simple yet important buy and sell decisions becomes a complicated process for many traders especially when the market moves against their positions right on the onset. Many of them enter the market for the wrong reasons or either too early or too late. There are traders who, after stringing together a few successful trades start to get careless and trade without a plan. They discard all the forex trading tips they learned from the veteran traders and start doing things their own way.
There are traders who are afraid to take a loss and are even more adamant to admit mistakes. Out of a wrong sense of pride, they desperately hang on to losing positions hoping the market will eventually turn in their favor. Pride and ego has taken out their objectivity in looking at good trading opportunities. This happens a lot and it happens over and over again even today. Traders are creating the problems themselves. They are letting emotions, pride, and ego take the better of them.
That is why every now and then, we need to stop and make an assessment of where we are and try to re-learn all the lessons we have picked up in the past as well as all the forex trading tips that have helped us get started on this business.
Here are some basic forex trading tips we must revisit every so often to survive the rigors of a volatile market like forex:
- Buy low, sell high.
- Never buck a trend.
- Never add to a losing position.
- Cut losses early and make the profits run.
These are age old forex trading tips that have been proven over and over again. They are simple trading rules that are simpler to follow yet forex traders continue to break them and continue to lose money in the process. They will find out soon enough that they are not contending with market forces. They are up against their own selves. Most of the time, the trading predicaments these forex traders find themselves in are self-made.
It is often wondered why these forex traders seem too eager to want to commit suicide in the market. The short bouts of success they have generated could inflate their egos so huge that they discard everything else they learned early on and try to take the market head on. The biggest mistake they could ever make is to forget that they are mere speculators in this trillion dollar market and the volume of their trade is not even a drop in the bucket.
It has also been observed how little knowledge can make people forget that they are but taking a free ride in this ever volatile market. They have so deceived themselves into believing that after some well thought of trading plan and some well collected fundamentals plus a thorough technical analysis, the market will (and must) move their way!
If you do not want to fall into the same trap, never forget one thing – the market never lies. It is only we who lie to ourselves.
