When an individual goes to the financial markets to invest actively, for example on the Forex, doubt can seize him at any moment, and this can, unfortunately, prevent him from taking the right decisions. It must be clear: Doubt is part of a trader’s life, whether he has a month or ten years of experience.
Common doubt situations
Let us take some examples of situations where phases of doubt can arise (any resemblance to situations that really existed would be pure coincidence ;-)):
- On which Forex pair today will I enter position? On which TimeFrame will I intervene? What strategy will I adopt?
- The Forex pair on which I have positions is super calm. Do I have to close and go on another pair or wait for the squeeze phase?
- I have position signals sent to me. Do I have to go now or do I have to wait for confirmation of these signals?
- I have a winning position and a great potential gain. Should I close it and if so, fully or partially?
- I have a losing position: should I close it partially to limit losses or do I have to wait until the Stop Loss is hit?
- I’m not in shape today. Should I stop trading for the day?
Perhaps you have recognized yourself in this inventory … All these questions are normal and legitimate; and people who say they have never asked such questions in trading can be suspected of big lie!
Fight the doubt
It is quite normal to doubt: trading is primarily a risk management and in difficult situations, doubt can easily invade the mind of the trader. Doubt, we can not escape! What we need to learn to do is to master it so that it becomes an important aid in risk management. There are several ways to do this:
- Build convictions by testing these strategies in demo, in different types of situations, on virtual accounts and trying to capitalize a maximum of experience. Keeping a journal is an excellent practice
- Have a proven and tested money management and risk management. This point is in my opinion the most important technical point, far from the control of conventional or esoteric indicators giving the input signals
- Know yourself by working on yourself (psychology is a component of trading that is essential and yet is completely neglected by most private investors) and knowing when not to go to the markets
- Learn to recognize mistakes to progress. “What does not kill us makes us stronger!” Said Nietzsche. In other words, for a trader, as long as there is capital, there is life, and therefore hope …
The best way to not lose money in the markets is not to go! Now, if you want to be active in the financial markets, you have to tame these moments of doubt that will happen suddenly, so that they are a source of progress.