Experienced or beginner, there is no way to escape the overwhelming nature of the markets. Any asset you choose to invest in can surprise you with the sudden rise and fall and rise again and each day there is a new set of rules we are trying to encrypt, encode and profit from.
With all that emotional roller-coaster in mind, I would like to go over 6 things every trader should remember when the market goes bananas.
Rule 1: It happened, it happens and it will always happen!
Here is the truth – trading is not always about gaining and profiting. There are times when the market smirks at you and walks the opposite direction. And no matter how emotionally draining this can be, you have to remember not to go psycho and stick to your trading rules.
Rule 2: You are not alone!
There is NO TRADER that doesn’t ever lose. If someone claims to be 100% profitable, please laugh at his face or better yet smirk and walk the other way! EVERYONE of us gets slapped by the markets.
Think about it. Even Lehman Brothers and all-mighty China gets financial good whipping! Do you really think that you are an exception?!
The beauty of forex trading lays in the fact that you can make up for the losses you have experienced. You are still an excellent trader and don’t let fluctuations cause a turmoil in your mind and soul.
Rule 3: Market’s love always comes back.
Tomorrow is a new day filled with even more opportunities and exciting market movements, so you can turn today into a well-learned lesson and move on. Get yourself together and be ready for tomorrow.
Rule 4: Have you really learned the lesson?
The storm is over and you look forward towards the new sunrise. Did you understand what happened? Have you analyzed the market behavior well enough to learn from this fall?
If you find the way to turn the loss into a valuable lesson, you have made a giant leap forward. Remember, it is only a loss when you do not learn from the mistakes.
Rule 5: Do not gamble. Think, analyze and trade.
Save your emotions and “intuition” for your girlfriend, Sunday night games and midnight walks with your dog. It is alright to listen to your gut when you trade forex, but if you only rely on your intuition to make a trade, you are simply gambling.
Read up the news, follow the economic calendar, and follow people discussions and comments on your favorite assets. Knowledge is the only way to make rational, calculated decisions needed in forex trading.
Rule 6: Plan it today, tomorrow and always.
Current market situation is definitely important to follow, but it might be also a great idea to keep up with update on your instruments for the future opportunities. Ensure that you are prepared for tomorrow!
And just to summarize, shake that bad-trade after taste and move on. The only way to make forex trading work for you is to follow your plan and spread your wings onward! Your past performance is not an indication of future results, but rather a valuable lesson that you can choose to ignore or take it in and make the best of it.