Arguing with a friend or family member is totally different from arguing with the market, when arguing with a friend you can present your case/point to look so true, real and lovely to win. But with the forex market, you will definitely lose no matter how hard you try.
To understand what I mean by arguing with the market? Let’s take an example.
Johnson* is a trader, who trades the forex market. As early as 5 am in the morning his up from his sleep to trade. He spends more than 30 minutes analysing a pair and when done, he place his trade and keep watching his computer, while praying for price to go in his favour. After 10 to 25 minutes, if price doesn’t go to his predefined direction, he close the trade and open another trade in the opposite direction –hoping he will make money from whatever direction the market move.
During noon at work he repeat the same process all over, except this time around he clouds his computer with colourful indicators. When the indicator gives any signals (either buy or sell) he quickly place his trade as indicated. His fear to lose money in the market makes him not to use any stop-loss but to manually monitor his open position so as to close it at will.
At 5:00 pm, Johnson is back home and rush to his computer to see the latest trade he had placed while at the office. This time he discard the indicators on his trading platform and log into groups that offers either paid or free signals and he copy’s this signals to his computer. Whenever he places a trade he keeps on hoping the market goes his favour.
How many of us trade like “Johnson” one way or the other. How many of us keeps arguing with the market just to win? And up-end up losing the entire argument.
The truth is many traders argue with the market too much that they fail to notice when the market is talking to us or trying to show us something. Arguing with the market in the sense that, we want all our trade to be a winning trade no matter what the consequences might be. We go to the extent of purchasing software’s, EAs, indicator, robots worth hundreds of dollars just to win the argument we have with the market.
The market is always right; this should be embedded in every traders head. No matter how hard you try to analyse the market it will always move in it determined direction, so you’re either with it or you’re against it.
Newbies, when they first start to trade, they keeps searching for the “short cut” or should I call it “the holy grail” and this result to them chasing for signals , which is every dangerous. Most signal providers usually target nothing more than 20-30 pips and you being the subscriber can be late to copy such signal which will result either in having a losing trade or to stay in the market a lot longer than one intended to start all in the bid to follow someone else’s signal. Supposing one is using a smaller account ($100 or below) with a high lot size/leverage, so as so maximize the profit from the pip movement, that single act alone, can lead to the pre-mature death of one’s account (margin call).
In summary, the market will always be there to proof to you that it is always right and you should never try to argue with it, cos you will surely lose. I always tell traders not to go looking for trades, but instead should be patience and listen to what the market is say so as to get into a good trade. Remember, in the forex market the impatient lose their money to the patience ones because they lack the virtue call patience.
Traders some times over analyse a pair, thinking that the pair will obey what they have drawn on their chart or follow the opinions of others, while many are guilty of just following the herd of sheep going into the slaughter-house. Remember trade your plan, and plan your trade.
Looking at the higher time frame can aid in reducing the way one trade. The higher the time frame used such as the daily timeframe the better and when using the higher time frame, everything seem slow and very clear, you can see a bullish or bearish trend as well as support and resistance all these things help to make one a better trader.
Do not expect all these things to happen overnight as it will take you time to master all this new concepts, it may be difficult to train your eyes to notice trend reversal, a strong support and resistance line but when fully mastered, it will be worth all the stress and pain.
I will love to hear from you please do comment below and share to create awareness among other traders to stop arguing with the market.
*Johnson is just an imaginary character which I use to make the example in this article.