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 hits two-day highs near 1.1820
EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.
GBP/USD reclaims 1.3600 and above
GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.
USD/JPY drops back below 157.00, as focus shifts to Japan snap election
USD/JPY is back in the red below 157.00 in the Asian session on Friday. The Japanese Yen recovers ground against the US Dollar amid some profit-taking ahead of Japan's snap general election on Sunday. The preliminary reading of the Michigan Consumer Sentiment Index report for February will be released later on Friday.
Editors’ Picks
EUR/USD: US Dollar to remain pressured until uncertainty fog dissipates Premium
The EUR/USD pair lost additional ground in the first week of February, settling at around 1.1820. The reversal lost momentum after the pair peaked at 1.2082 in January, its highest since mid-2021.
Gold: Volatility persists in commodity space Premium
After losing more than 8% to end the previous week, Gold (XAU/USD) remained under heavy selling pressure on Monday and dropped toward $4,400. Although XAU/USD staged a decisive rebound afterward, it failed to stabilize above $5,000.
GBP/USD: Pound Sterling tests key support ahead of a big week Premium
The Pound Sterling (GBP) changed course against the US Dollar (USD), with GBP/USD giving up nearly 200 pips in a dramatic correction.
Bitcoin: The worst may be behind us
Bitcoin (BTC) price recovers slightly, trading at $65,000 at the time of writing on Friday, after reaching a low of $60,000 during the early Asian trading session. The Crypto King remained under pressure so far this week, posting three consecutive weeks of losses exceeding 30%.
Three scenarios for Japanese Yen ahead of snap election Premium
The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.
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