All traders meet disbelief on their strategy when they keep losing. In most of the cases traders will shift to other strategies. I also did the same. After sometime I understood that it is not about strategies but about psychology. Of course there is no strategy that gives 100% true signals. They give around 60-80% true signals which are more than enough. But in spite of these percentages we keep losing. The reason for these failures is character and psychology. In this article I will share my mistakes/reasons that make me lose. I reflected my trading method in my article one currency master trading.
Wish to catch the trend earlier
By analyzing my trend history I found that I don’t wait completion of all criteria. At the end I lose.
My trading method says that trend end is near when ADX falls and MACD shows divergence. But for us to be able to sell here in chart, 21 EMA and price have to be below 144 EMA. I saw ADX and MACD signals and decided not to wait EMA signal and lost money two times.
Losing focus and deviation from method
When I am concentrated in one direction I can lose focus and can’t see signal.
Price reached the highest point. It touched resistance level and I had a feeling that it will not break it and EURUSD will fall. So I sold from highest point. But as you can see on chart, ADX climbed above 25 and raises same as MACD. At the result price fall at first but then climbed even higher and hit my stop loss.
Getting angry to the market when I fail
I can’t control my anger when I fail predicting the price move. It seems luck is against me. I get angry and want to beat market.
This chart is from my contest trading account. Here I repeated mistakes mentioned above but it also better reflects how I lose control when I am angry. As you can see on the chart first I decided that the price should fall from fundamental and political reasons. Price climbed and hit my stop loss. After sometimes it fall again and I decided to sell again. Price started climbing one more time and making me nervous. At the end I kept selling and increasing the lot every time. Luckily I recovered my loss but it was not a clever idea to trade like that. That is how traders lose all their money at once.
Dear friends as you can see from my examples above it is not only about the strategy but also about our character and psychology. With very simple strategy and simple rules we can be in profit if we can control our characters that stop us from successful trading. I understood that rules and ability to abide is the key to the success. Traders get different results using the same strategy. Some lose, some achieves little increase and others have huge gains. It depends on rules and how well they abide them. I will cover trading rules for increasing profitability of our trades in my next article.
Wish to catch the trend earlier
By analyzing my trend history I found that I don’t wait completion of all criteria. At the end I lose.
My trading method says that trend end is near when ADX falls and MACD shows divergence. But for us to be able to sell here in chart, 21 EMA and price have to be below 144 EMA. I saw ADX and MACD signals and decided not to wait EMA signal and lost money two times.
Losing focus and deviation from method
When I am concentrated in one direction I can lose focus and can’t see signal.
Price reached the highest point. It touched resistance level and I had a feeling that it will not break it and EURUSD will fall. So I sold from highest point. But as you can see on chart, ADX climbed above 25 and raises same as MACD. At the result price fall at first but then climbed even higher and hit my stop loss.
Getting angry to the market when I fail
I can’t control my anger when I fail predicting the price move. It seems luck is against me. I get angry and want to beat market.
This chart is from my contest trading account. Here I repeated mistakes mentioned above but it also better reflects how I lose control when I am angry. As you can see on the chart first I decided that the price should fall from fundamental and political reasons. Price climbed and hit my stop loss. After sometimes it fall again and I decided to sell again. Price started climbing one more time and making me nervous. At the end I kept selling and increasing the lot every time. Luckily I recovered my loss but it was not a clever idea to trade like that. That is how traders lose all their money at once.
Dear friends as you can see from my examples above it is not only about the strategy but also about our character and psychology. With very simple strategy and simple rules we can be in profit if we can control our characters that stop us from successful trading. I understood that rules and ability to abide is the key to the success. Traders get different results using the same strategy. Some lose, some achieves little increase and others have huge gains. It depends on rules and how well they abide them. I will cover trading rules for increasing profitability of our trades in my next article.
