Forex Trading: Unconventional Truths

Forex Trading, despite its potential for profit, has resulted in many beginner forex traders losing their capital and busting their accounts. There are many important truths about Forex Trading, that do not seem intuitive to the human mind, but holds true regardless. In this article, we will explore more about how more isn’t always better, how even the right trades can go awry, as well as other counterintuitive truths that would aid you in your forex trading journey.

To start things off, one of the most counterintuitive truths about forex trading is that trading lesser can lead to greater profitability in forex. The reason for this is that frequent trading incurs more commissions and fees. At the same time, it increases the likelihood of costly mistakes. It is more ideal and realistic to focus on high-quality trades and wat for optimal setups that can lead to better results.

Similarly, the optimal setup can also result in an undesirable outcome. Even when your analysis is spot on, the market can move against your expectations due to a variety of unforeseen factors. As a forex trader, it is important to understand that the forex market is influenced by a myriad of favors and sometimes it does not adhere to logical and sensible trends.

This ties into the next point, in which you must recognize that no one can control the movement of the forex market. The forex market is large, liquid and uncontrollable. It is driven by supply and demand dynamics that are well beyond the influence of any singular trader or trading entity. It is thus important for us to focus on managing our risks within this uncontrollable environment so that we can continue trading and profiting another day.

One must therefore be patient while trading, as the optimal setup does not appear every day. Traders must have the patience to wait for the right trading opportunities to emerge. Having the idea that you must trade and profit every single day is a mindset that most traders have, and this has more often than not, caused them their downfall. Do not see trades when there are no trades to be taken, and do not be blinded by short-term gains and lose out in the long term.

Human psychology is of utmost importance to us Forex Traders to become masters of our emotions. Forex trading can stir strong emotions. Strong feelings of despair, anxiety, as well as glee can be invoked, depending on whether the market moves in your favor or not. Effective traders would control their emotions; including the positive ones. Being too emotionally affected by trading will lead to costly mistakes. Some traders might chase their losses, some traders might go on a winner’s high and trade more due to greed. Manage these emotions well, and you will see their effect on you.

In summary, success in forex is not always intuitive, and sometimes the truths are counterintuitive. By managing your emotions, you can introspect and acknowledge that you, as well as everyone else, are unable to control the market. This will lead to unpredictable outcomes despite finding the optimal setup. Be patient, and know that by trading less frequently, you avoid the less optimal trades that could result in more losses for you.