If you are looking for a nice trading philosophy then you must keep in your mind some points. You have to control your emotions, always use stop loss, never hold your loss making positions, trade in forex market manually, Never love any particular currency pair.
Developing the proper trading psychology is crucial if a trader is to have any trading successes. This is an area that many novice traders tend to overlook while they are educating themselves. Sad to say, there is no magic formula with which a trader can forgo having to develop the correct “Trader’s Mindset”.
There are two common mistakes that many beginner traders make trading without a strategy and letting emotions rule their decisions. After opening a FOREX account it may be tempting to dive right in and start trading. Watching the movements of EUR/USD for example, you may feel that you are letting an opportunity pass you by if you don't enter the market immediately. You buy and watch the market move against you. You panic and sell, only to see the market recover.
Before you enter a trade set a clear profit goal. This means you know when close the trade and exit. Sometimes people get greedy and try to stay in there with the hope of making more profits. New forex traders often commit this mistake. They might even get few high profit trades only to see that finally a huge drop in currency price destroying all their funds.
Similarly, if a trade goes against you, do not try to hold on in the hope that the market will turn back your way. In such a case your forex trading strategy should be to cut your losses and get out and when you set proper goal for each trade you know when to quit. You can also make use of stop losses to do this automatically.
If you do not have a trading plan, make one. If you have a trading plan, follows it strictly! Never ever attempt to hold your weakened position and hope the market will turn back in your favor direction. You might end up losing all your capital if you keep holding. Move on, stay within your trading plan, and admit your mistakes if things do not turn as you want.
Always keep in mind that:
* There are no black boxes that churn out 80%-plus winning trades
* There are no perfect indicators
* And there ain’t no Holy Grail
Trading is a tough game. There are many more losers than winners. If it was easy, we’d all be multi-billionaires by now.
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