Typical Trading Errors Part 1
Many beginning traders do a lot of typical for them trading errors. Of course, it is not the only reason of that in the course of gamble people lose money … However it affects also, finally, before to press a key of the computer or to click by the left button of a mouse, the trader tests idea of the transaction in the head.
Pathological addiction of beginning traders to an overexposure of positions is only a tracing-paper of one of models of behavior which people adhere in usual life. To test a brick wall for durability is a hobby of many my compatriots; experience of service in airborne troops prompts that such brick which wouldn’t scatter from blow about a head of the member of army isn’t produced yet. And experience of overcoming of an educational obstacle course testifies that whatever obstacles had been equipped this strip, the soldier will overcome it, and will keep within a standard time. Authors of books about exchange trading sate the books with analogies from military science; allow also to me to use this acceptance, however, with one reservation: that works in the field of military science, doesn’t pass in especially peace enterprise to what trade in market FOREX concerns.
Testing in real life is the most important criterion of any theory, concerning gamble. Our habit to suffer to the last and to postpone visit to the dentist until the pain doesn’t become intolerable, serves us bad service in trade. Seeing a loss on the account, the beginning trader hopes that finally the destiny will appear to it more favorably, the market will be developed also the trader will return all with interest. Sometimes events develop under this scenario; as consequence, the beginning dealer becomes stronger in opinion that the main thing in trade is to be able to wait. Perhaps, patience, is really, one of the most important components of successful trading.
As consequence from all aforesaid we have a situation when instead of recognizing the wrongfulness and to be closed on stop, the dealer suffers. This patience has borders. At a certain stage the dealer or the risk-manager closes on stop, or the pain becomes so strong that the trader is ready to resort to any means if only to neutralize it; emergency closing is unprofitable. Having released from a pain, the dealer is again ready to rush to fight, however, considerably decreased account balance says to it that it is necessary to be more careful.
In case you decided to participate in forex trading must start from learning the basics of this market to make sure you do not experience problems with this industry.