If you can't keep your emotions in check when trading, you will lose money. Lots of it. Pipsychology was created to help minimize this from happening to you. The most significant action that you can do to improve trading profits is to work on yourself. Really knowing yourself and how you think can give you an edge that others in the market don't have. My goal is to share practical advice to Don't Set Yourself Up to Fail Yo
Have you set yourself up to fail? Here are the bare minimum you need in order to avoid failure as a trader:
Money
Trade only with money you can afford to lose. Many new traders trade with their milk money and wonder why they feel scared when they enter and watch their trade. If you want to trade calmly and rationally, you must trade with only money you can afford to lose. If you have nothing to fear by losing, you'll feel more relaxed. You will trade better and make less errors.
Plan
Don't trade by the seat of your pants. Map out your trades in detail. Know where to enter or where to exit. When you execute the trade, stick with your trading plan. Know what to do and when. Amateur traders do the opposite. They have no clue where to enter and exit. If they do have a plan, it's probably unclear and difficult to follow. They don't know what to do so they eventually panic. Creating a plan and following it will help you avoid costly trading errors.
Sleep
Don't miss sleep. When you're tired, it's hard to concentrate. Your emotions take control of you and you feel deep frustration, even when you face a minor setback. Concentration requires energy, and when you're tired you don't have enough energy to trade and end up making errors and losing money. Get sufficient sleep so you can stay alert and are ready for action.
Trading is hard enough. You don't need to sabotage yourself. By trading with money you can afford to lose, sticking to your trading plan, and making sure you get enough sleep, you give yourself the best chance to grab some pips from the market on a consistent basis.
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Archived Comments (2)
Forex Blog: Pipsychology
its true, I've had 3 large losing streaks, and they were all due to lack of sleep leading to overtrading. sometimes it's hard to tell you're tired, especially when you're making money.
Thanks for the tips here, In my case to avoid losing money too much in trading, I prefer a forex trading strategy where you are not in front of a computer all day waiting for trades to happen. It can be like watching paint dry. I also find that it is harder to keep your emotions in check when you do this. The most important thing when currency trading is to take the emotion out of it. Otherwise you won’t make any money trading.
I prefer an end of day trading strategy as I place my trades at night and forget about it till next night at same time. A company I have found good for this is makemoneycurrencytrading dot co dot uk as I can usually place the trades based on their strategy in 15-30 mins. I work full time and have a family so I can’t spend all day at screen nor would I want to.