that needs to be understood by once a perception of the external factors of trading has been made. The real job for a trader is to know his own mind. Working according to the external elements is a comparatively easy job, as they generally are quiet objective, accurate, reliable, and structured.
But same cannot be said about the trader's mind, which is firm at one minute, and soft in the other.
While trading and being a part of the ongoing fluctuations in the market, an investor undergoes an enormous range of thoughts and emotions. While some might turn out to be good like feeling lucky, or victorious, the others might turn out to be bad like fear of failure or anxiety. But going through all this turmoil, it is highly exceptional to come across a trader who constantly sticks by his initial trading plan.
When it comes to trading Forex, or any business for that matter, sentiments or emotions are the biggest hitch. This is because all these emotions tend to make a trader go weak when it comes to maintaining discipline and balance and adhering to the predefined trading plan.
What needs to be understood here is that discipline, control or restraint is far more important while trading Forex than the real currency traders are here to trade. This is because any kind of capital can only be sustained by anyone with correct management techniques and discipline.
A trader in this Forex trading business has a lot of value to the market. When a trader trades equipped with a thoroughly studied trading background and past trends and comprehensible goal study, he has the ability to build on a superb trading system.
This said, no guarantee can be taken of any trading system or approach, as it can rise to success in 1 second and go down into losses in the other.
And what's more, the basic reason for this downfall is that a trader while going by his predefined trading plan must have at some point tried to mix it with his gut feelings or emotions. One thing should always be made clear that emotions have absolutely no place in trading.
These emotions generally come into play when a trader either encounters a large loss or a huge win. Emotions in such cases then tend to cause a trader to act in a different way, making him act illogically and foolishly at times just to go ahead and mess up his planned strategy and play the large moves by his gut feelings. Emotion causes the trader to apply his trading system in patches, with emotions taking over now and then.
Using simple trading strategies can get you to make big wins in the market, provided you stick to them through out. Professional or experienced traders always trade using conventional, carefully planned money management strategies which would enable them to trade with complete stability.
When it comes to large financial firms and institutions, complete stability is never an issue with them, as they have not one, but many human resources and assets at their side.
But when we talk about an individual investor, we can easily divide them into three different groups.
The ones who trade with inconsistency,
The investors who trade with manual constancy
And the traders who trade with programmed reliability.
While a new trader would always hop from one trading strategy to another, an experienced trader will work smoothly with constant restraint and discipline making it the basis of his trading actions which will help him increase his level of refinement.
