tips to become the best forex traders – stop overthinking
The art of creating problems that never existed, to begin with, overthinking destroys your trades right in your mind way before any concrete result can be seen! Planning ahead of time is something necessary while Forex trading, no doubt. However, some traders tend to plan a little too hard, and in the process lose their peace of mind, and a good sum of money.
Trading is best done completely invested – monetarily, mentally and emotionally. This intense approach seldom involves thinking in-depth. The outcome of a trade should be the least of your worries! Traders spend a lot of time thinking several steps ahead, trying to avoid problems that might not ever surface. Over-analyzing is in no way going to better a trader’s chances of success, yet the masses continue to fall prey to it.
Succeeding as a Forex trader requires that you be equipped with strong charting tools and indicators, and power your trades with many reliable Forex trading strategies. Thinking too much will only keep your focus diverted from what lies ahead!
What Triggers Overthinking While Trading Forex?
Overthinking is a strong emotion and can lead to a number of harmful repercussions, but there has to be a causing factor behind it. When faced with certain circumstances, traders tend to fear the possible outcomes of a trade, hence causing overthinking. Here are the most common reasons behind this condition:
1) Fear of Losing Trades and Wronging
Several Forex traders are conscious about their trading records. Not everyone takes losses in a sportive manner. Fearing losses, traders end up avoiding exchanges altogether! This fear usually happens due to overleveraging or risking more than necessary. Forex trading markets are going to be eternally filled with risks, that’s the kind of field foreign exchange is. To get over the fear of losing, start by accepting the simple truth those losses can’t be avoided. Even on an easy market, you can lose a good sum of money. The risks taken have to be affordable; most traders bite more than they can chew and this leads to severe losses.
Work on a Forex demo account as you begin, to get used to the ups and downs of foreign exchange.
2) Past Trade Outcomes
Once bitten, twice shy – after a good few losses made, traders tend to become overly cautious. While being alert is fine, it shouldn’t get to the point where you let the past chase you around. Also known as recency bias, Forex traders find themselves consumed by the outcome of their past ventures which hinders them from making profitable exchanges in the future! The trades placed in the past have no influence on the ones made in the present. While it is natural for similar trends to make an appearance, absolute repetition is something you won’t find in Forex trading trends. Focus only on researching the markets and obtaining relevant trend information from it.
That’s what controls the outcome your trades bring!
3) Missing Out Trade Opportunities
Commonly known as FOMO (Fear of Missing Out), many Forex traders find themselves in a situation where they’re so afraid of missing out on a good trade, that they don’t take a chance at all! Forex trading is one of the most liquid markets in the world. In the layman’s terms, there is never a lack of opportunities in Forex. This situation leaves traders stuck where they stand. Unable to trade and afraid of missing out, the aura around traders becomes paradoxical. As a Forex trader, this should be the least of your worries.
Trading opportunities lie in plenty, and you will never see them in shortage!
4) Trade Regrets
Once a trade has been placed, it is no longer in your control. Forex traders often tend to overthink about how they could have done better or avoided certain mistakes. Retrospective analysis is a necessity, but only to correct your approach. There will never be a point crying over spilt milk, so why regret trades that are long gone? Getting consumed by trade regrets keeps you from focusing on the now, and making up for the past losses! When you look at Forex trading from the long-term perspective, you will realize that every now and then, some losses will have to be made and they are unavoidable.
So don’t punish yourself over a few bad trades!
5) Addiction To The News
Agreed that the news has an impact on Forex markets, it is however not so that the news is all that matters while Forex trading. Foreign exchange is governed by economic, political and social conditions surrounding a country. And having a keen eye on the news will help you stay adept and prepared for when the markets move against you. While prior preparedness is advantageous, it shouldn’t become an addiction to the point where you spend more time watching the news than trading itself!
Get yourself a Forex demo account today, practice the basics and keep honing your approach. Overthinking only sits in a mind that’s undisciplined! When you follow a set of regulations and don’t allow yourself to be shaken, victory is bound to come by. Avail the world-class brokerage WesternFX offers, and climb the ladders of success swiftly! Our experts will provide you with stellar FX trading solutions and ensure you are equipped with the necessary strategies and platforms. Call us today to know more!