In the absence of a precise trading strategy indicating firm entry as well as exist, it becomes highly likely for a trader to face loss at some point. Generally, when it comes to beginners, if a process does not go exactly as planned, most simply abandon any plans they might have had. They fail to rely on logic and end up trusting emotions instead. On a frequent basis, these new traders keep using the same old methods that never amount to any profit. What is more frightening is the fact that a lot of these traders do not let go of their weak position even when circumstances repeatedly indicate them to do so, simply because their minds cannot envision the thought of losing at any cost.
But why is it so hard for people to see things logically and adjust accordingly? Well, firstly, there is ego involved. When someone is likely to go through loss, the person ends up convincing himself that nothing is going to be bad, because it is far easier to live in a world full of fantasy than to accept own bitter mistakes. Psychologically, denial is much more comfortable than confrontation, and that is the reason why so many people fail to control their emotions, and end up with empty accounts as a result of resisting change. It does not happen with everybody, but it is pretty common with beginners nonetheless. This is precisely why you must try to identify your negative patterns, and break free when necessary.
Record your trade patterns in a way that gives you power to analyze your mistakes and blunders later. You must be keenly interested in what is going on, and you need to spot any existing problem. If you care to examine things very closely, you are most probably going to indentify patterns. With the habit of keeping trade record, it becomes far easier to identify detrimental patterns, and embrace positive ones.
Trading is almost always going to hurt you if you are unable to free yourself from denial. In order to break free of old patterns, there are a number of steps you can take. For instance, if you find yourself trading under stress, you must stop, because when stressed, the mind tends to work inefficiently. Moreover, it always helps a lot if you take small steps by investing low amounts of money at first. At times, you may even need to completely leave the trading world temporarily, and start fresh after a while.
There is another huge part attached with healthy trading, and that is a sense of objective attachment. If you forget every other thing in your life and concentrate on trading alone, then you may face a rough ride. Don’t put all your emotions into forex. Spice things up in life in different ways, apart from trading. That way, even if something goes wrong, it will not affect your life all that much, and moving on will be much easier.
The most crucial step is to understand that trading is a game of uncertainty, and there will always be events out of control. If you let yourself believe the fallacy that most outcomes can be controlled to a great degree, then you may be setting yourself up for a lifelong disaster.
To put it into perspective, you need to be able to take risks with grace, and understand that there will be times when things are going to be out of control. Of course, you have got to do all you can to minimize risks by day trading creatively and with a free mind; however, know that there will always be limits! Also, firmly decide entry and exit points, and make yourself stick no matter what. Moreover, trading in small amounts at the beginning is helpful too when it comes to long term winning. Other than that, be sure to test your method on paper a few times until you’re confident enough to test the same in the real world.