Forex trading can be a complicated business. More often than not we know what bad things can disrupt our trading. Greed, distraction, poor money management skills. We tend to think that if we can only eliminate these problems then forex success would be easy.
However, there is another problem, one that comes from having ‘too much of a good thing’.
These 5 events are undoubtedly positive, but they can often lead to the opposite.
However, there is another problem, one that comes from having ‘too much of a good thing’.
These 5 events are undoubtedly positive, but they can often lead to the opposite.
Making too much money early on
The best thing that can happen when trading is to make money and to make too much is even better. But if you make too much money too early, while you are only just getting started it can lead to overconfidence. That overconfidence can lead to complacency, and in turn that can lead to ruin.Hitting a lucky run
For exactly the same reason, being lucky in the market can be a big problem too. Striking lucky in the market feels great at the time but all too often it leads to greater risk-taking. You start to feel invincible and that you are a natural and that means you start seeing ‘bad luck’ all of a sudden.Finding an unexpected entry (without an exit)
Forex trading is about scouring the price charts looking for profitable patterns and setups. Sometimes you come upon a setup that you weren’t expecting, in a timeframe or market that you don’t normally trade. The setup is too good to pass up so you make the trade. However, by doing so you forget about important criteria such as your money management rules, your trading plan and your exit.Trading in a bubble
We’ve seen it happen so many times in the stock market but it happens in forex too. Traders getting on the right side of a bubble and riding it to the top. Problem is, those who are in the bubble often don’t know when to get out. They often end up staying in the bubble while it pops and then trying to get back in all the time the bubble collapses.When you move your stop and make a profit
Usually, it’s not wise to move your stop after your trade has been placed. Your trading plan should dictate where to place your stop according to your money management rules. Sometimes, if you move your stop, you end up making money, a lot of money. And if you had left it where it was you would have lost. The difficulty with this approach is that it’s down to luck and the reward that comes from making the mistake just reinforces bad behaviour.
Editors’ Picks
EUR/USD gains traction to near 1.1800 as tariff uncertainty weighs on US Dollar
The EUR/USD pair holds positive ground around 1.1795 during the early Asian session on Tuesday. The US Dollar weakens against the Euro amid US tariff uncertainty. The release of the US January Producer Price Index report will be in the spotlight later on Friday.
GBP/USD treads water near 1.3500 as BoE-Fed divergence debate stalls
GBP/USD spent Monday spinning in place as market participants await a fresh catalyst to break the pair out of its recent range. The BoE's February hold came with a surprisingly dovish 5-4 split, and UK Consumer Price Index data last week showed inflation easing to 3.0%, reinforcing the case for earlier rate cuts, with most economists now looking to April or March for the next move.
USD/JPY sticks to modest gains above mid-154.00s; upside seems capped
USD/JPY edges higher during the Asian session on Tuesday and looks to build on the overnight bounce from the 154.00 mark as intervention fears could offer some support to the Japanese Yen. Apart from this, bets that the BoJ will stick to its rate-hike path could limit JPY losses. Apart from this, uncertainty over Trump's tariffs may continue to undermine the US Dollar and contribute to capping the currency pair.
Editors’ Picks
AUD/USD edges higher in a one-week-old range amid tariff jitters, Fed-RBA divergence
AUD/USD gains some positive traction following the previous day's late pullback from over a one-week top, though it remains confined in a familiar range amid mixed cues. Trump's tariff turmoil keeps US Dollar bulls on the defensive amid Fed rate cut bets, while supporting the Aussie amid the RBA's hawkish stance. However, the cautious market mood acts as a headwind for the currency pair.
Gold climbs above $5,200 on geopolitical tensions, trade uncertainty
Gold price jumps to around $5,230 during the early Asian session on Tuesday. The rally of the precious metal is bolstered by heightened geopolitical tensions and global trade uncertainty following US tariff decisions. Traders brace for the US January Producer Price Index report on Friday for fresh impetus.
USD/JPY sticks to modest gains above mid-154.00s; upside seems capped
USD/JPY edges higher during the Asian session on Tuesday and looks to build on the overnight bounce from the 154.00 mark as intervention fears could offer some support to the Japanese Yen. Apart from this, bets that the BoJ will stick to its rate-hike path could limit JPY losses. Apart from this, uncertainty over Trump's tariffs may continue to undermine the US Dollar and contribute to capping the currency pair.
Solana DeFi platform Step Finance to close operations following treasury hack
The Solana based decentralized finance platform Step Finance announced it will end all operations effective immediately following a breach that drained its treasury.
Supreme Court nixes tariffs, Trump teases 15% global tariff
On February 20th, the Supreme Court ruled that Trump’s global tariffs under IEEPA authority were unconstitutional, effectively nullifying the framework. However, the relief was short-lived. Within hours, Trump floated a 15% blanket tariff under an alternative legal authority.
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