It is important that you pay attention to the highs and lows of daily chart as it gives you information if you should take, hold on or close your trade.
Depending on what kind of trader you are, you may have to face your computer screen for long hours to find trading opportunity. This is especially true if you are a Forex Scalper. Scalpers usually hold their trades for less than an hour, sometimes with huge positions to catch small number of pips. Often, they have no stop loss and take profit levels and trades are closed manually. With this approach of trading, you really need to stay sharp so you know how to react when market becomes volatile.
The market does not trend all the time. There is no point staring at the computer for trades when market is ranging. When you stare at the computer screen for too long, your itchy fingers will start to do things which you are not supposed to while your weary eyes will start to see things when they should not. What i mean is you will start to identify sub-optimal trades, knowing that the trades do not seem to work out, but you do not have trades to play with, hence you take the trades because you want to be in the market and do not want to miss out any opportunity. I guess many people understand what i mean. Eventually, they realised that the trades went against their favor and they wished the trades were not taken.
Have you ever thought of why you are losing money consistently?
If you think about it, how can you lose money consistently when the odds of you losing is only 50%. However, it is true that some traders lose money month after month. In fact, the odds of you losing is higher than 50% since you have to consider the spreads.
Back when i first started trading, i remember a mentor told me that you should only trade what you see but not what you think. Over the years, I have heard this phrase countless times but i always feel that it is so important that i will need to write it down and paste it in front of my computer to remind me.
If you are overtrading, we advise you that you should cut back your positions or you will not see your account equity for long. Sometimes, you are doing everything right but you are still losing money. That is because of overtrading. When you overtrade by trading 10 positions at any time and you risk 2% per trade, you are effectively risking 20% of your equity. With this method of trading, you will see that your account equity fluctuates drastically. At times, you will see huge returns but you must also withstand sharp draw down.
Many people who come across trading will want to trade on a part-time or a full-time basis. Like some of you, I started trading at a young age, after reading a travel blog of a girl who works and holidays at the same time by doing forex trading. From then on, I am so determined to master forex trading, devoting all my free time reading up on forex related books.
Having been trading for years, i can tell you why this is still the best job ever.
You have been trading well, getting overly excited that you are starting to master forex trading, you start to trade more. Few days later, you start to give back all of your forex profits. Does that sound familiar?
This phenomenon seems to affect everyone from time to time. You never seem to be trading better but your equity just hovers around the same level, winning some and losing some. It can get very frustrating to the point of giving up forex trading. We understand that since we went through that as well.