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.
Any opinions expressed by our company’s representatives regarding the prices of specific currencies and the direction they will take in the future are purely opinions and are used for demonstration or training purposed only. They do not necessarily represent the opinion of Thelazytrader.com are NOT guaranteed in any way. In no event shall Thelazytrader.com have any liability for any losses incurred in connection with any decision made, action or inaction taken by any party in reliance upon the information provided verbally or via the Internet, or any delays, inaccuracies, errors in, or omissions of information.
Editors’ Picks
EUR/USD hovers around 1.1850 ahead of FOMC Minutes
EUR/USD stays on the back foot around 1.1850 in the European session on Wednesday, pressured by renewed US Dollar demand. Traders now look forward to the Minutes of the Fed's January monetary policy meeting for fresh signals on future rate cuts.
GBP/USD defends 1.3550 after UK inflation data
GBP/USD is holding above 1.3550 in Wednesday's European morning, little changed following the UK Consumer Price Index (CPI) data release. The UK inflation eased as expected in January, reaffirming bets for a March BoE interest rate cut, especially after Tuesday's weak employment report.
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 hovers around 1.1850 ahead of FOMC Minutes
EUR/USD stays on the back foot around 1.1850 in the European session on Wednesday, pressured by renewed US Dollar demand. Traders now look forward to the Minutes of the Fed's January monetary policy meeting for fresh signals on future rate cuts.
GBP/USD defends 1.3550 after UK inflation data
GBP/USD is holding above 1.3550 in Wednesday's European morning, little changed following the UK Consumer Price Index (CPI) data release. The UK inflation eased as expected in January, reaffirming bets for a March BoE interest rate cut, especially after Tuesday's weak employment report.
Gold retains bullish bias amid Fed rate cut bets, ahead of Fed Minutes
Gold sticks to modest intraday gains through the early European session, reversing a major part of the previous day's heavy losses of more than 2%, to the $4,843-4,842 region or a nearly two-week low. That said, the fundamental backdrop warrants caution for bulls ahead of the FOMC Minutes, which will look for more cues about the US Federal Reserve's rate-cut path.
Pi Network rally defies market pressure ahead of its first anniversary
Pi Network is trading above $0.1900 at press time on Wednesday, extending the weekly gains by nearly 8% so far. The steady recovery is supported by a short-term pause in mainnet migration, which reduces pressure on the PI token supply for Centralized Exchanges. The technical outlook focuses on the $0.1919 resistance as bullish momentum increases.
Mixed UK inflation data no gamechanger for the Bank of England
Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.
RECOMMENDED LESSONS
Making money in forex is easy if you know how the bankers trade!
I’m often mystified in my educational forex articles why so many traders struggle to make consistent money out of forex trading. The answer has more to do with what they don’t know than what they do know. After working in investment banks for 20 years many of which were as a Chief trader its second knowledge how to extract cash out of the market.
5 Forex News Events You Need To Know
In the fast moving world of currency markets where huge moves can seemingly come from nowhere, it is extremely important for new traders to learn about the various economic indicators and forex news events and releases that shape the markets. Indeed, quickly getting a handle on which data to look out for, what it means, and how to trade it can see new traders quickly become far more profitable and sets up the road to long term success.
Top 10 Chart Patterns Every Trader Should Know
Chart patterns are one of the most effective trading tools for a trader. They are pure price-action, and form on the basis of underlying buying and selling pressure. Chart patterns have a proven track-record, and traders use them to identify continuation or reversal signals, to open positions and identify price targets.
7 Ways to Avoid Forex Scams
The forex industry is recently seeing more and more scams. Here are 7 ways to avoid losing your money in such scams: Forex scams are becoming frequent. Michael Greenberg reports on luxurious expenses, including a submarine bought from the money taken from forex traders. Here’s another report of a forex fraud. So, how can we avoid falling in such forex scams?
What Are the 10 Fatal Mistakes Traders Make
Trading is exciting. Trading is hard. Trading is extremely hard. Some say that it takes more than 10,000 hours to master. Others believe that trading is the way to quick riches. They might be both wrong. What is important to know that no matter how experienced you are, mistakes will be part of the trading process.
The challenge: Timing the market and trader psychology
Successful trading often comes down to timing – entering and exiting trades at the right moments. Yet timing the market is notoriously difficult, largely because human psychology can derail even the best plans. Two powerful emotions in particular – fear and greed – tend to drive trading decisions off course.