Home Beginners Forex Education Forex Basics How Too Much Information Can Destroy Your Trades

How Too Much Information Can Destroy Your Trades


It may seem a strange question, but people have asked this before: “Will too much information ruin your trades?” While it might be somewhat unlikely, the truth is that too much information can complicate your trades, and even end in losses. From my experience, there is a possibility of having an information overload. This is also known as “analysis paralysis.” In other words, you have too much information that prevents you from making a clear and precise decision.

Even though it may look a little strange, the fact is that too much information can overwhelm the trader, making him afraid to open a position. The idea of putting up a trade is too stressful, but when you have conflicting information, it can make things a little difficult. As the main rule, I tend to say that when there is too much conflicting information, it is better to stay out of the market. I like to be safe enough when I put money on the market, but I also recognise that my security in a trade does not necessarily mean it will work. There is one thing you should remember when you place a trade: it is important to pay attention to crucial information, not to all information.

Pay Attention to What Matters

One of the main problems for traders is that they can be influenced by any news, tweet, or rumor they might hear. Unfortunately, reporters and people on social media commenting on politics or economics generally have very little knowledge or are not experts on how markets move. The truth is that reporters are just that: reporters. Your job is to give the best possible information, not so much give their opinions. Economic ads are important and should be read and analyzed by traders. I simply question whether reading an analysis of the economic ads counts as reading the news, and I don’t think it does.

The trend is also something important to which you should pay attention, you must accept and learn that the fact of if a currency pair has a rising trend, it has it for a reason. It doesn’t matter how “right or wrong” news is, because price action is what makes you money. If you buy during an upward trend and the market continues to grow, you are making money. Fighting the collective wisdom of the markets will lead you to lose a significant amount of money. Too much trading information.

It is also important to read economic ads along with trend analysis, not as an individual story. Economic advertisements may vary in their importance and you should think about the general trend of economic advertisements for a particular currency. For example, if America’s economic announcements have been strong over the past few months then it makes sense that the US dollar is going to strengthen. A particular ad rarely makes a difference in the trend.

Everyone Has an Agenda

When you inquire about available information, you should keep in mind that everyone has an agenda. Your broker, for example, wants you to imagine that there is a huge amount of money waiting for you every moment of the day (which might be true). Because of this, the brokers publish news that they expect them to take to action. Why is this? Because they make money with a difference, and they make money when you lose in a trade. Don’t let broker news be the only information responsible for your trading decisions, as there is a lot of information.

The forums are also a place where I have seen much destruction done to the accounts of retail traders. Unfortunately, in the beginning, when you start trading one of the first things that notice is that there are a couple of forums that many people visit. A little common sense can vanish when it comes to the conversations you have in those forums, and they should not be seen as more than just entertainment and nothing else. If the old adage that 90% of traders lose money, in the long run, is true, then that means 90% of traders in the forum are losing money. If that is the case, why bother to listen to their opinions?


I cannot stress enough that you need to be very cautious about the information you take into account before making a trade. For example, I’m a technical trader. It’s because of this that I rarely pay attention to news or economic ads, and I just follow what prices do because, in the end, that’s what matters to me. Even if you are a trader who relies on fundamentals must be careful to read other people’s analyses and be sure to do your own research without relying on outside opinions. You should also look at economic data such as GDP, interest rate decisions, employment, and the like.

What you won’t find particularly useful will be the opinions of other people. It doesn’t mean they can’t be correct, but the reality is that when you put in a trade, you and only you may be responsible for it. The universe is full of people who are not able to accept responsibility for their own decisions, and in the commercial vortex that can ruin it. However, we must also think about the fact that optimizing the process not only simplifies the process, it also keeps it connected to what interests it.

Decide what is truly crucial in your trades and focus on it. Understand the fact that you will have occasional losses but in the end, you must earn more than you lose. Unfortunately, if you have too much information affect your trading decisions you could start to go in and out and make bad decisions based on concern. Even worse, it could move quickly between the sale and the purchase. Most of the time this type of event causes you to incur losses. Much more important is not to let other people dictate how to trade with your account, as they have nothing to lose with their trades.


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