This year marks my 4th year in the forex business and to be exact I know actually what works and what doesn’t but you know what recently I have been trading out of fear and do you know what happened? On more than three different occasions, i lost a lot of money.
So how come, this is because I decided the trading method i was using wasn’t fast enough and needed something that would be in and out, more like scalping. I’m not saying to scalp isn’t alright, nope, not at all but that wasn’t the type of trading I was use to and deciding to trade that way really made me ignorant of a preceding trend and I kept buying when i was supposed to be selling, you know like some nasty expert advisors out there that is said to generate massive amount of cash and which keeps buying even when the trend is down.
Also, I failed in a most important part, keeping my account open for excessive drawdown, how do i mean you’d ask?
When you take a trade and you do not count the cost of the trade and become irrational with your funds, you are actually opening your account for a drawdown. When you embark on taking any trade without pre-planning an exit strategy, then you are risking good money for nothing.
Now the number one advice I’d like to give to anyone hoping to trade confidently is this, stick to a trading style which consist of your exit strategy cum your money management check up.
If you are deficient of this like I had been, then I’d like to advice you to turn back to demo trading or better still trade smaller lots in your account using this same strategy until you’ve become used to it and re faithed your self in your strategy.
Trading different strategies is like a man or a woman who never gets satisfied with a partner, such a person can never settle down in life. Re-trust your strategies and stick with it come rain or sun.
Also its pertinent here that the time frame you trade here should be of utmost important and the indicators you use in taking trades. What do I mean, using a time frame like 5mins keeps you open to all the noise in the market and you may never really know when a trend is in formation thus you end up selling when the trend is just about buying or buying when the trend is all about selling. This is not to say that trading 5mins chart is bad, no not at all but this should be done when you are looking to take some gains in anticipation of a move either long or short the pairs you are trading.
I specifically had been trading the 30mins, 1hr chart and trading this cahert gives you confidence that no matter the trend you are always on time and following it without any fear of losing especially once you are already profitable. You just set your take profit and your trailing stop and can go do other things because no trade is likely going to take you out without a profit to your kitty. See the post on trading with time frame to learn how to trade with 30mins or 1hr candle.
I think I’ll drop my pen here till later. Stay conscious and play safe trading.
Happy pipful day.
