November 9, 2020 | AtoZ Markets – People can only control a few things in life. They can eat healthy food and still be overweight or ill, drive safely, and still get bumped by a drunk driver in the opposite lane. And the same is true in forex trading, people might think they’re in control, but the traders control very little when it comes to trading. It’s all an illusion.
Traders, Concentrate on What You Can Control
An experienced trader must know that the markets can become random at times. And even when they are not, there could be unexpected headlines that cause the market to move dramatically without warning. Unfortunately, traders can only do so little about these instances. But they can instead focus on things they can control.
There are only a few things people can have full control of when trading.
- Entry and Exit
This is the most obvious one when traders are in or out of the marketplace since there is nothing that says they have to maintain open positions at all times. If traders see that the marketplace is very complicated to read or understand, stay out. After all, there’s no point in risking money in a place where they have no idea which direction they must be trading.
- Stop Loss
Traders are the only ones who can decide where to place the stop loss and whether or not it is still valid. By sticking to the stop-loss levels, traders can get rid of many heartaches when it comes to trading. A stop loss isn’t necessarily a failure. It is recognizing that the trade is not panning out the way it should. And at that point, traders see that it is better to cut the losses and live for the next day.
- Get Profit Orders
Orders to take profit are what traders can control even after they enter the market. If they have a level that they believe the market will aim for and need to take profit order there, they could just let the trade ride. Sadly, too many people worry about the market pulling back after starting to profit, which is a simple human behavior. The fear of loss consumes traders, especially when it could happen so suddenly. But if traders stick to take profit targets and don’t let their minds convince to change them, they might actually end with more profit than they would if they sell before they hit the target.
- Trading Psychology
The truth is, it’s hard to control inner-thinking and feelings. Still, with proper training, people can control trading psychology to their ultimate benefit. The inner voice will likely attempt to convince in making changes to the orders or trading strategies to get better results. However, one of the most crucial ways to control trading is not to let the inner voices mess with setups. Trading must be scientific, not based on emotions or other psychological influences. Do not rush in learning about trading psychology. Take time to master resisting the voices pushing to abandon the proven strategies.