Thursday, April 23, 2015

Chasing the Market Movements

I do not make many guarantees, but I assure you this; when you chase the market movements trading a highly leveraged instrument, like retail spot forex, there is no faster way to donate money to the market! I can also say with a level of certainty that you will try it.
A novice forex trader will analyze the market and assess a level of probability in their evaluation of whether the market will go up, down or sideways hoping the market will invite you in at any time. You may be anxious to get into a trade for the “thrill” (more on this later), because you just can’t wait to make money, and decide to jump in when the market appears to have decided on a direction. Now that you have committed to a position, the market immediately moves against you.
When analyzing the market with a desire to get in a trade right now, you will seriously consider the possibility of taking a long position or a short position and try to take a shot at what you think the market will do and decide to place a trade. When your trade is on, and the market appears to be moving against your position, you will recall that you seriously considered the opposite direction at one point and that you would have been correct if you placed your trade to go in that direction. Now that the market is currently moving in the opposite direction and you’ve convinced yourself that you were right the first time, you decide to dump the existing position at a loss and place a new order in what you now believe to be your original and wise insight as to the profitable direction of the market. Then, the market will continue its typical behavior by moving up, down and sideways, causing you pain and confusion. Baffled 

by this, you lose any connection with rational thought and decide that you do not want to take too much of a loss and end up dumping the second position and incur a double loss.
This is only one such scenario when you take on this manner of trading. It is unlikely that you considered your equity management at any time before or during this experience. you

will see that our approach to entering trades is a professional method that aims to enter at a specific price.

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