Forex trading is one of the greatest money-making opportunities available these days. People from many walks of life, men and women, decide to join the forex trading world every day in search of the great lifestyle that a profitable forex trader can achieve.
But Forex trading is also a battle where you can lose your money and your confidence if you are not smart enough in your battles against the market, a smart, often formidable, and even ruthless enemy.
There is an old saying by the Chinese military genius Sun Tzu who said that “obsession with victory is a state of mind that benefits the enemy”. And these wise words undoubtedly apply to the world of forex trading. In the battle with the markets, nothing can harm a trader more than “obsession with victory”.
Many new traders think that they should never close a trade until it turns into a profitable one; or they think that their predictions based on a particular indicator and technical analysis will always be correct and that the forex market will start behaving the way they predicted at any moment, even though the charts clearly show that it doesn’t and the account’s margin is exhausted.
This is by no means a wise forex trading strategy; it is not a wise war strategy. With this behavior you will only be giving free money to the markets, meaning you will succumb to your obsession with being profitable even when everything is against you, which implies that you should close the trade or tighten your stops.
Therefore, never get obsessive when trading the forex markets; nothing good can come out of this behavior. You should always place your stops according to your tolerance level and be smart with your indicators. Remember that they can disappoint you. They mostly tell you the probabilities and when dealing with probabilities, there is always room for strange behavior that will not agree with what you expect.