It happens to the best of us; that moment when, despite knowing that the time is right, that your chart makes this a perfect trade, that you’ve got the money and could lose it if you needed to (even though you probably won’t), you just don’t make the trade. You’ve got trading analysis paralysis. So how to combat trading paralysis? There are some tried and true methods to get you back on track.
It’s Just A Confidence Thing
It could be a confidence thing, definitely. You may well have lost confidence in yourself and your own abilities, and that has led you to be unsure about even the most secure looking of trades. But you’ll need to work out how to combat trading paralysis if you ever want to enjoy trading again. And it might not just be a fluctuation in your confidence that is doing it.
So What Else Could It Be?
Well, to be fair, it’s always a lack of confidence, but it’s how and why that came about that is the key to understanding the problem and getting round to combat trading paralysis.
The first – and main –reason is that external influences are putting pressure on you. They may not intend to, they probably have no reason to, but they are doing it nonetheless. Maybe it’s a fellow trader, the news, a trading website, anything that you read, hear, or grow to learn about that might affect how you feel about a certain trade, even when in reality it’s perfect. Or as close as it ever gets in trading.
How to survive in forex by combating trading paralysis linked to a third party? Ignore it all. If your strategy works and yet external forces are causing you to undermine it by second guessing then you simply need to push those external influences away.
And If It’s Not Them…It’s You
So if it’s not an external force that’s making you doubt yourself, it must be an internal one. That’s a trickier one when it comes to working out how to combat trading paralysis, but it can be done. Don’t psych yourself out. Do that and you’ll soon be watching in dismay as a trade that met all of your criteria takes off big time, only you decided not to enter it.
You over thought it.
And there is no need for it because your plans and your chart are solid. So to combat this kind of trading paralysis the key is not to think about the trade. At all. If it matches up to your plans, then you do it. Don’t start wonder about this, that and the other or you’ll convince yourself not to trade at all.
That Confidence Thing
Even if you are as prepared as you’ll ever be, you still may not feel as though you know enough to prepare you to trade properly. This causes problems. But to combat trading paralysis caused by a feeling of not knowing enough, it’s fairly simple – get training. Read books, watch online tutorials, hire someone to teach you everything you need to know. This will increase your confidence no end and will ensure that you are more than happy to trade when the circumstances are right.
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Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
USD/JPY goes on a roller-coaster ride prompted by geopolitical risk
USD/JPY whipsaws lower and then higher on alternating risk-on risk-off caused by Middle East tensions. Governor Ueda talks about defending the Yen from further weakness and currency-induced imported inflation. USD/JPY price chart shows bearish Hanging Man forming, boding ill for future price action.
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.
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