How To Make A Good Trading Decision.
Many traders fail so many times due to bad trading decisions.
The big one is rather surprising. You don’t make that much money if you are trading with limited capital. Most people think of traders are hyper-wealthy, and some traders make a ton of money. However, they make massive amounts of money because they are trading massive amounts of other people’s money. If you trade with limited capital, you will find it extremely difficult to even break even, much less make a decent living.
It’s an extremely stressful job because you are constantly reminded of your incompetence. You will mess up constantly even if you are good, and it’s often not clear whether you are making a mistake or if you have bad luck.
One other thing is that a lot of trading involves managing human psychology, and a lot if being a good trader involves understanding deeply how your mind works. You have to go deep inside your soul and look at yourself through the mirror of the market. Sometimes this involves confronting rather unpleasant truths about yourself.
A good trading decision guaranteed trader success.
1. To make a good trading decision, you must be mentally relaxed. There should be no pressure on your mind for not losing. You must be ready to accept losses and to wait for the next opportunity.
2. If you are using the money for an education loan, you have no mental independence. You are overwhelmed with the pressure of making all trades in profit. This pressure will not let you accept losses.
3. What happens when you do not accept losses? Ans: You hold position or you ad more position to your previous losing position to exit all positions without loss. This becomes a GRID style to Martingale style eventually which are the main reasons for the total loss.
4. Search on Google for GRID and Martingale, Also search for trading psychology. Also search for emotional factors affecting trades, e.g. greed, fear.
5. Your fear of loss will never let you get success in forex trading.
6. Use any money which is not involving strong emotion. Use surplus money which does not affect your basic life even after the loss. It will give you mental independence and you will get success in trading.
You have to deal with some very, very strong emotions. Trading is ultimately based on fear and greed, and you feel the neurons in the deep core of your reptile brain firing, and you have to find some mechanism to keep everything under control. The problem with trading is that it can be very, very addictive, and if you aren’t very, very careful, then you end up seeking the addictive rush rather than making money, and this can be wildly self-destructive.