Finance & Investment, Forex Trading - The Reason Most Traders Can't Accept Big Profits and Bank to Soon
Here is a common scenario.
A forex trader decides on the trend direction and executes his trading signal - he gets it right and it moves into profit, so he's pleased. Now he moves - but in the wrong way. The bigger the profit becomes, the more he wants to take it - before it gets away and as it gets bigger, open equity swings eat into his profit more and he liquidates, or puts his stop up close and gets taken out the trade.
What happens next?
The trade continues in the way that he thought, piles up tens of thousands of dollars and he is not in!
It's a common scenario and the trader has made some fatal errors.
1. If a trend is in motion, it's more likely to continue than reverse so why try and get out?
2. Emotions and confidence issues means he wants to bank and get out - he doesn't have the confidence that the trade will run on despite the evidence.
3. He moves his stop up inside normal volatility and is guaranteed to be stopped out.
The problem is most traders don't want to trade long term trends, despite the evidence that the big ones last for many months or even years.
Most traders don't have the confidence in what they are doing and lack the discipline to take dips in open equity as a normal part of trading.
You have to lose short term if you want a big gain and keep your eye on the bigger prize when you close out hopefully months later!
Most traders always want to put stops close to lock in profit the problem is they put them to close within normal volatility and get taken out. You need to trail your stop right back outside of normal volatility to win, sure you give back a bit at the end but if you caught 50% of every major big trend, you would be very rich.
It takes courage to accept the big gains from the big trends and a disciplined mindset - but if you have confidence and discipline, you can hold the bigger trends for longer and enjoy forex trading success.
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Related Tags: currency trading, forex trading, forex mistakes, forex mindset, win forex, forex trading discipline
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