The psychological stress in forex is one of the main thingsthat holds your profits back and the most simple answer to it is confidence.Imagine that you are a technical trader and you are looking for a signal, itdoes not matter what strategies are you using and you get your buy signal andinstantly place an order to buy. After you make the order you just hope thatthe price will go up. That is it, you have no confidence nor conviction . Youactually have no solid reason for believing that the price will go up.
If that is the case, you should not do that trade. I knowthat the price will go up or will go down, it may look bad at start, or Ientered at a bad price, but ultimately it will get to my price, because I amconfident. The moment I lose confidence I just exit the trade and automaticallylose. If you have experienced that is what‘s holding you back, because you aremore prone. What if you place a buy order and the price goes against you?Because if you have no confidence you will not be able to hold it for verylong. You have no idea what is moving the price and think that it may go onforever, so you need to have trading confidence, what traders call conviction.
Conviction means to understand when you can hold or when youshould fold. You ask how do you get that confidence? You attain it byunderstanding what is moving each currency. If you know that you are buyingGPB/USD because there is massive speculation that Bank of England is going toincrease rates the next month and they are talking really hawkish. So everyoneis very confident and if you place a buy order and the market goes against you,you still have the conviction to hold it, because you know that it will not besold for long, because of the sentiment. On the other case, if you get in at afavorable offer, you will hold it for a little bit longer, because you knowthat they are going to increase the rates. That is the main difference, if youare trading technically it does not even matter what currency are you trading,because you have no idea what is moving those currencies. That may be the mainreason why you are struggling to get confidence and profits by trading theForex market.
Editors’ Picks
EUR/USD extends slide toward 1.1800 on renewed USD strength
EUR/USD extends its daily slide and trades at a fresh weekly low below 1.1850 in the second half of the day on Tuesday. Renewed US Dollar strength, combined with a softer risk tone keep the pair undermined alongside downbeat German ZEW sentiment readings for February.
GBP/USD falls below 1.3550, pressured by weak UK jobs report
GBP/USD remains under heavy bearish pressure and falls toward 1.3500 on Tuesday. The UK employment data highlighted worsening labor market conditions, bolstering bets for a BoE interest rate cut next month and making it difficult for Pound Sterling to stay resilient against its peers.
USD/JPY is looking for direction around 153.00 with key US data in focus
USD/JPY reversal from 153.70 has been contained above 152.70 on Tuesday. Major currencies are trading within narrow ranges amid thin trading volumes. Investors await the release of the US GDP and PCE Inflation figures to make decisions.
Editors’ Picks
EUR/USD extends slide toward 1.1800 on renewed USD strength
EUR/USD extends its daily slide and trades at a fresh weekly low below 1.1850 in the second half of the day on Tuesday. Renewed US Dollar strength, combined with a softer risk tone keep the pair undermined alongside downbeat German ZEW sentiment readings for February.
GBP/USD falls below 1.3550, pressured by weak UK jobs report
GBP/USD remains under heavy bearish pressure and falls toward 1.3500 on Tuesday. The UK employment data highlighted worsening labor market conditions, bolstering bets for a BoE interest rate cut next month and making it difficult for Pound Sterling to stay resilient against its peers.
Gold recovers modestly, stays deep in red below $4,950
Gold (XAU/USD) stages a rebound but remains deep in negative territory below $4,950 after touching its weakest level in over a week near $4,850 earlier in the day. Renewed US Dollar strength makes it difficult for XAU/USD to gather recovery momentum despite the risk-averse market atmosphere.
Crypto Today: Bitcoin, Ethereum, XRP upside looks limited amid deteriorating retail demand
The cryptocurrency market extends weakness with major coins including Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) trading in sideways price action at the time of writing on Tuesday.
UK jobs market weakens, bolstering rate cut hopes
In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.
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