Sunday, February 25, 2018

Forex: Being Mindful of your Trading Opportunities

June 27, 2010 by  
Filed under Forex Strategy, Trading Mindset

There are some very important principles to track a very likely profitable trade. The essential component for choosing a trading opportunity are :

  • low degree of risk
  • big profitable possibility
  • how secure the trade is

It is very wise for traders taking these measures into consideration before entering a trade. The better the trader can gauge his profitable results, his trading account can be very big in the long run.

Low degree of Risk

This level of risk varies from trader to trader’s psychology and the deposit he willing to put in. the two important aspects that trader will be tested will be:

  1. His patience towards uncertainty
  2. The amount of equity he has in his trading account and the amount he is willing to risk each trade.

The trader must realize that he may need to risk a small portion of his money. Therefore, you need to be mentality prepare to risk this certain amount of money. That is why you should assess the risk factor, figure out whether the trade will bring profit or otherwise, before you go in and take the risk. The best opportunities give the best risk to profit ratio. To look deeper of the risk to profit ratio analysis, it should be measure potential risk with potential profitability. Also look at the chances of achieving it and the time take for it.

When it comes to money and investments, there is always risk. Just like life is always accompanied with death and taxes. As best trading opportunities gives good risk to profit ratio, time is also another factor traders should put in consideration. For example, if the trader has a day job, he has no time to stay whole day in front of his computer. For him, he should avoid intraday trades. Traders need to take their time to make their forex trading decisions. If the traders rush to make a trade, the results may not be pleasant. If the trader does not have time to follow his trades, which need attention and management, he will most likely lose money. The best trading opportunities should matches the trader’s time schedule.

In currency trade, putting more money than you can afford to lose will causes unnecessary stress which will make you make terrible decisions. Not all traders can handle this tension. Do take note that it is important for you to measure your own level of tolerance on risk. The longer you trade, the more experience you will have. And more experience you have, the higher the level of tolerance. However, bear in mind this does not mean you can forgo money management.

If you notice something odd, or if you do not understand any characteristic of the trade. Avoid it. You should always be aware of the trades you make. Money and forex are like a relationship, avoid casual sex with strangers and have a faithful partner. This greatly reduce your risk of contacting HIV or STDs. Similarly, to be profitability in trading forex, you have to be constant earning profits in the long term using one tested proven money making strategy. Just follow the rules the strategy gives and you will be safe from ‘HIV’ losses.

Die, die must never forget your money management rules. Don’t be too happy because when you have a few successful trades and it will blur you mind. Just 1 single and simple mistake can wipe out a series of profitable trades. What a waste of money and time

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