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 keeps the bullish performance above 1.0700
The continuation of the sell-off in the Greenback in the wake of the FOMC gathering helped EUR/USD extend its bounce off Wednesday’s lows near 1.0650, advancing past the 1.0700 hurdle ahead of the crucial release of US NFP on Friday.
GBP/USD tumbles below crucial 1.2500 as bears move in
GBP/USD turned south and dropped below 1.2500 in the American session on Thursday. The US Dollar continues to push higher following the Fed-inspired decline on Wednesday and doesn't allow the pair to regain its traction.
Japanese Yen trims some intraday losses as BoJ data supports Japan's intervention
The Japanese Yen rallied on Wednesday amid speculations of another intervention by authorities. The momentum, however, runs out of steam on the back of the divergent BoJ-Fed policy outlooks. Traders now look to the second-tier US data for some impetus ahead of the NFP report on Friday.
Editors’ Picks
AUD/USD regains the constructive outlook above the 200-day SMA
AUD/USD advanced strongly for the second session in a row, this time extending the recovery to the upper 0.6500s and shifting its focus to the weekly highs in the 0.6580-0.6585 band, an area coincident with the 100-day SMA.
EUR/USD keeps the bullish performance above 1.0700
The continuation of the sell-off in the Greenback in the wake of the FOMC gathering helped EUR/USD extend its bounce off Wednesday’s lows near 1.0650, advancing past the 1.0700 hurdle ahead of the crucial release of US NFP on Friday.
Gold stuck around $2,300 as market players lack directional conviction
Gold extended its daily slide and dropped below $2,290 in the second half of the day on Thursday. The benchmark 10-year US Treasury bond yield erased its daily losses after US data, causing XAU/USD to stretch lower ahead of Friday's US jobs data.
Bitcoin price rises 5% as BlackRock anticipates a new wave of capital inflows into BTC ETFs from investors
Bitcoin (BTC) price slid to the depths of $56,552 on Wednesday as the cryptocurrency market tried to front run the Federal Open Market Committee (FOMC) meeting. The flash crash saw millions in positions get liquidated.
FOMC in the rear-view mirror – NFP eyed
The update from May’s FOMC rate announcement proved more dovish than expected, which naturally weighed on the US dollar (sending the DXY to lows of 105.44) and US yields, as well as, initially at least, underpinning major US equity indices.
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