A fact of Forex trading is that most traders take their profits as a result of an emotional impulse instead of exiting the market at a pre-determined target or from a pre-planned exit strategy. As a result, traders who exit a trade on emotion typically take much smaller profits than they would like, while traders who exit a trade based on logic and discipline typically are very happy with the profits they take.
There is also an element of being realistic here that I need to touch on before going into the examples below. You see, struggling traders who exit emotionally tend to think they are going to somehow squeeze every last pip out of a move and this causes them to have difficulty closing a trade that has moved into a nice profit. Successful Forex traders who know and accept the fact that they cannot take every pip out of a move, are more than happy to settle for taking out of moves and exiting their trades when they are significantly in their favor, instead of panicking and exiting at the last minute as the trade comes crashing back to their entry.
There is also an element of being realistic here that I need to touch on before going into the examples below. You see, struggling traders who exit emotionally tend to think they are going to somehow squeeze every last pip out of a move and this causes them to have difficulty closing a trade that has moved into a nice profit. Successful Forex traders who know and accept the fact that they cannot take every pip out of a move, are more than happy to settle for taking out of moves and exiting their trades when they are significantly in their favor, instead of panicking and exiting at the last minute as the trade comes crashing back to their entry.
Taking profits on emotion vs. taking profits on logic
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