You might as well take your money to Vegas and gamble it away instead. Once your money is all gone, at least it was entertaining. Greed is the worst motivation for trading. The market will always punish greed and will always reward moderation.
There is a fine line between traders and gamblers. When there is real money on the line, there are always those who take blind chances. Remember that luck comes and goes just like the gambler. As a trader, you must realize that anything can happen in the markets. I know, I know, the idea just sounds silly! How can you, as a trader, become consistently profitable from a market that has uncertain outcomes?
Casinos are profitable year, after year, after year, despite having a business where the outcome of each card laid down, dice roll, or slot pull is unknown each and every time. While it is true that there will be some lucky ones that will win and walk away with millions of dollars, casinos know that if they get a large enough sample size, there will be more losing patrons than winners in the end. The game is fairly simple. By tweaking the rules, like charging a very small commission or reducing the payout if the banker wins with a certain number, the odds are turned slightly in favor of the house.
You have to remember that what differentiates trading from gambling is being able to bend the odds in your favor. That is why, as a trader, your mindset should be akin to that of the casino and not the gambler, who merely focuses on one event or trade at a time. To become consistently profitable, you have to trade like the HOUSE and play the advantage over a series of outcomes. How can you do this, you ask?
Here are a few tips:. First, you need to learn the market behaviors, patterns, and tendencies that could be recognized in the future and turned into a trading opportunities. This comes from reviewing price action against a framework support and resistance, mechanical indicators, economic events , etc.
This is also where keeping a trade journal becomes a necessity. Using the data from your journal, you can focus on the setups that have had higher probabilities of winning, rather than those setups that tend to lose. You can tilt the odds of long term success in your favor even more if you limit yourself to setting up or taking trades that have an attractive risk-management ratio ie. The better the reward-to-risk ratio, the less often you need to win a trade.
For instance, if you notice that you are good in spotting double top formations and trading them, then you can devise a trading system that focuses on finding setups based on double top chart patterns. Last but not the least, you can look to other traders in addition to your own analysis. The web is loaded with free economic and technical analysis content.
The secret to acheive true success is found in your daily routine. Partner Center Find a Broker. If you can't keep your emotions in check when trading, you will lose money. The most significant action that you can do to improve trading profits is to work on yourself. Really knowing yourself and how you think can give you an edge that others in the market don't have. My goal is to share practical advice to improve your forex psychology without boring you to death.
Hopefully, you can develop the mental edge you need to become the best trader you can be.More...