The question I’m usually asked is, “what’s the biggest mistake that Forex traders make?” The question is more complex than it seems because mistakes are usually accompanied. The usual culprits are lack of capitalization, poor analysis, poor risk management, or even a lack of a robust trading strategy. Even though all these mistakes are relevant I think the answer can be summed up in one thing: a complete lack of patience.
Patience in Trading
Patience matters more than anything in trading. I bet a lot of you were going to say that the number one error in Forex trading is an inappropriate position size. That is the de facto standard response that most analysts and forex experts give. We take it for granted that this is a crucial problem for most retailers, but even that can be reduced to a complete lack of patience. After all, think about what causes an inappropriate position size: it is the mentality of getting rich fast. That is simply a lack of patience in essence.
Lack of a Trading System
If you do not have a trading system or at least one that is reliable, it is probably due to a lack of patience as well. After all, it has not taken the time to have a system in order to position its trade. You haven’t spent time learning technical analysis or anything else on which to base your trade. Even if you did, have you tried it? , a true trading system is the one that has been tested and must have the ability to understand what is the expectation of it. If you have not done all this, you are simply trying to run before you have the ability to walk. Lack of patience will cost you money.
Breaking Their Rules
Let’s just say he’s done the right thing and has a decent trading system that is expected to make money in the long run. However, you sit at your terminal in the morning and recognize that there are many obstacles to making some strong positioning. Unfortunately, many of you will continue and trade anyway, because of a lack of patience. This will make you make bad decisions and certainly lose money as the market will somehow have no direction or at least will not respond to your strength. Remember, sometimes we get paid to do nothing and wait for an appropriate time.
Trading for Revenge
Trading for revenge is short on patience personified as well. Why? Because you got a loss and now you’re trying to get the money back frantically. Unfortunately, we’ve all been in that situation. You took a position that you thought was valid but some random event that affected the market got you out of it. It’s very complicated not to take those moments personally and certainly, the first thing you think about is getting your money back. However, doing a little trading for revenge makes you more likely to lose more money than you originally lost. By not waiting for the next appropriate moment, you are demonstrating a lack of patience, which is the worst thing that can happen when it comes to Forex trading. Keep in mind, when you lose money, that’s it. If you do continuously, you won’t have enough capital to keep progressing.
Not to Investigate
You have to keep in mind that the fundamentals of a trade never really change, there are many details you will need to pay attention to. For example, I have been trading in futures markets, shaping markets. This is something I have done before, because I come from the world of Forex, therefore the true volume of the market is something that is elusive. Although you may be able to earn money on the futures market without shaping the market, I think it helps a little. I am right now investigating it from the point of view of someone who is doing a test, showing that even after many years of trading, there is always something new to learn. Indeed this is one of the great things about this initiative: it never stops teaching you, if you feel like learning. If you don’t have them, trading isn’t for you.
Not Consulting with Yourself
A big mistake I used to make was not consulting myself. What I mean by this is paying attention to my state of mind while trading. Frankly, some days are just not good days for trading. If you have money and are not comfortable or just too agitated you will need to stay away from the markets because they will try to provoke you to the fullest. There is nothing worse than having some external problem causing you anxiety or a feeling of discomfort while you are trading making you lose money many days in a small amount of time. I’ve been there, and it’s one of the worst things you can do. Why do you do this? Because you’re not being patient. You don’t understand there’s always a tomorrow, assuming you keep your trading capital intact.
The Main Conclusion Is…
I know this sounds extraordinarily cliché, but trading is like a marathon and not a short race. In fact, I would say that one of the most valuable parts of trading is how much of the lessons will influence your daily life outside trading if you allow it. Patience is certainly one of the main rules that the market teaches me every day. Patience is easily much more relevant than any other problem the trader faces. After all, if you stand aside and just look at things in a calm and rational way you could normally find the solution. However, in the heat of a trading session is not always the easiest thing to do.