Being Too Aggressive While Entering A Forex Trade
Aggressive trading in Forex
Sometimes the price action seems so good to the eye that you cannot control yourself to enter the trade and that is the biggest mistake you make. You get yourself into a trap which is called aggressive trading in Forex.
Ever saw the price going up really fast? You’d think oh man lets buy this its going nuts.. and you get in as soon as you can no matter what the price! Then as soon as you’re in a little profit, it reverses like crazy? It’s not because you got in there silly! It’s because you were chasing the price up! That’s about the worst mistake any trader can do. Don’t chase the price up, let the market tell you when to enter. If you really want to excel in this market then invest your effort and time in proper risk management and logical trade execution.
Time frames plays a pivot role in assessing a market’s support and resistance level. A novice trader when looking a 15 min chart will think that by trading on this time frame I can make money more quickly because it gives lots of signals and I will not have to wait for days for my trade to execute. This is where you have to be careful and save yourself from aggressive trading in Forex. It’s true that lower time frames do give lots of signals but these are low quality signals whereas higher time frames give few signals but they are most reliable and work out well. So always check out longer time frames for support or resistance levels.
Another important thing to keep in mind is to trade with a calm and fresh mind. Sitting before a laptop and watching your trade all the time will make you stressed out, staring at it won’t change what it does anyway 🙂 If you see your trades going in loss all day long you will doubt your trading plan and could just make the mistake of getting out as soon as it’s going to go in your favor. You could also start to think of new trades with a stressful mind to get back your profits or look for people giving out signals for a quick recovery and will do what they say because you think that you are not efficient enough to read charts and create trade ideas. You should always trust your own ideas, though it never hurts to share it or discuss it with others. Keep in mind, not every trader see’s the same thing in the market, they may give you a totally different view of your trade idea, not necessary to change your views based on it but it is always a good idea to check out the possibilities.
If you do face a loss on your trade idea, you should always go back and look at what mistakes you made, whether they were avoidable? Whether there’s something you missed out that you should make note of next time you try something like this? So always make notes, that helps. Make sure you outline the problems you face in the trade. These things will help you become a better trader and your losses will be a lesson learnt instead of just losses. Never give up on yourself and keep working till you find your way through to those profits!
So I hope that now you understood that why aggressive trading in Forex is not good for you.
Any comments or questions will be highly appreciated.