Making it simple. Is probably one of the most complex thing we have to discover. With a lot of indicators around, forex traders tend to think that the more indicators they have, the more money they make. What is the difference between a forex trader with no indicators and a forex trader with indicators?
The forex trader with NO indicators keeps it simple. Indicators tend to confuse forex trader when a lot of indicators doesn’t match. They tend to think too much and not rely on their own decision making to take a trade. This is present among new forex trader where they will try every indicators available and use it. Up to the point where they get their first loss then drop it.
A forex system will bring losses. It will bring winning trades. Some will have more losses than wins. It is ok. As long as the winning trades can cover the losses up to the point that you’re still profitable.
A forex trader will have emotion. But must not be affected by it. This is what makes forex trading addicting. To constantly in the roller coaster ride. You know you are safe, but its still a death defying experience. With a profitable trading system, you know you will win but the price action still affects you.
There are questions that a forex trader can ask himself before taking the trade. Before entering, after the confirmation signal. He asks:
- What is my profit?
- Where is my stop loss?
- Why do I take this trade?
Can simply summarized by asking oneself of the reason for entry (evidence of a profit potential, a set up or confirmation signal), what’s your target profit and how much risk are you willing to make?
These questions are simple. Three questions that a forex trader can answer easily. The problem lies to whether he can keep his emotion. Psychology plays an important role. Forex trading systems work. Banks use them to earn money. But its the person using it makes it possible to NOT to work.