Taking Decisions Based On Previous Performance
Although trading is very simple, investors like to spend as little time is possible in Forex. Many people like to develop a strategy only for one time and then, they will start using this for countless decisions in the future. This is the biggest misconception that exists in this industry.
Many investors believe that once a formula has been developed there is no need to work on that furthermore. That technique will take care of the investment and all the people need to do is manage the fund appropriately. As they keep on trading, the performance gradually declines and eventually lost the entire refund.
This article will help the readers to understand why any future decisions should not be based on previous performance in currency trading. Although it may seem the right technique, in reality, this is a suicidal method. This habit is the sole reason why many beginners perform well initially but lose the entire fund after a few months.
Every volatility is unique
The first thing that you need to understand is every pattern that is appearing on the chart is unique. There is no relationship between the past movements, hands investors should focus on analyzing the chat from scratch every time they are investing.
The pattern which exhibits in the past month is not going to repeat itself in the next month as well. Once the trend is gone, it is gone forever. Many traders believe that there is an inherent tendency of the market to repeat any past movement but the accurate time is unknown. Even if that volatility is going to repeat itself, we are not certain when this will happen. This might happen tomorrow or in the next month but the investors cannot wait for an indefinite time.
When a person is developing a technique or method that has been derived from past activity, a high chance exists that it will fail. This is the reason why the experts always advise to analyze the market from the beginning whenever you are thinking of placing a neutral even if the dominant pattern is still ongoing.
Stop committing the same mistakes
Thousands are traders are doing the same mistake again and gain. If you want to survive as a currency trader, you can’t afford to make the same mistake. Doing the same mistake repeatedly can cause major trouble and lead to catastrophic loss. But if you learn to trade with discipline like the experts at ZuluTrade, you should stay focused and take quality trades without giving a second thought.
Be brave with your decision and it will elevate your trading mindset and make you great at trading.
The market is evolving with the news
A key factor in currency trading is there is no fixed information. The last month coma a major news release can understand the price of oil and gold but this month the opposite can happen.
The self-evolving nature of this industry is very puzzling and dangerous. However, if there is any possibility that the old news may resurface, there is a high chance of influencing the price direction. This seldom happens and the experts always advise to remain updated with the latest developments in the financial world.
If you are wondering whether you should spend time to find similar news, this is not a good concept all. This will take an enormous amount of time to research all the news and identify whether the present return has any chance of resembling the past.
From the above discussion, it should be clear that every decision has to be made based on the latest analysis. Even if there is remote possibility repetition it should not be used as the danger involved is high.
The traders need to be hardworking, hence they should focus every time from scratch whenever they are taking any financial decisions.
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