As with choosing of indicators, the restriction of “time cuts” of the market considerably simplifies life. I used to meet traders who tried to work with unusual time intervals, for example, 23-minute in a combination with 36 and 53-minute. After that other time intervals were chosen, and everything repeated. It is natural that in the course of studying of interactions of the base 23-minute graphic with 48-minute the purpose was completely lost, the purpose for the sake of which any person comes to the market, – to arrange transactions and to earn money. If the theoretical oddities of a trader accurately prevail over the work directly on the market the only thing, I can recommend in this situation, is to find a job as an analyst. Such people are not helped also by mechanical trading systems because after receiving a signal from MTS anyway it is necessary to do something, instead of beinng engaged in its next adjustment, calming itself that, as MTS is mistaken too also this signal is “absolutely precisely” false.
As you can see from the definition, it is necessary to carry to indecision and action-inactivity at the moment of being in a position. Indecision does not allow profits to grow (if the position is chosen correctly) or allows losses to be saved. It is natural, when the paper profit of the transaction grows, a trader wants very much to transform this profit to real faster and not to be dragged any more by psychological cargo of an open position. Probably, this situation also is defining at a choice of time intervals which a trader feels comfortable to work with. The correct choice of this interval can help with the decision of a question of premature closing of a profitable position. The output from a position with restriction of losses is a corner stone of all activity of a trader, and indecision at the moment of output from an unprofitable position can turn back with full loss of control over a situation.
If the stop-losses, placed on the basis of the technical analysis, are not executed because of indecision try to establish the maximum size of losses on a portfolio a month (for example, 5 % as traders in banks are limited) and if losses have exceeded this size – immediately liquidate all positions and do not start trade prior to the beginning of next month. Otherwise you simply will recruit the ranks of nice harmless animals from which professionals cut wool. So, if you have broken this rule, and have lost in percentage more than size established by you, and the position is still open, most likely, there has come a paralysis. To define a paralysis condition is simply enough and though different people emotionally display this condition variously, in the trader’s slang there is a concept of “warm bath”.
At the moment of a paralysis you plunge into “warm bath” that consists of your own sweat, fear and despair. And this is a very contrast condition – at the moments of movement of the market to your direction you feel simplification for some time, even emotional lifting, and then are even more deeply dipped into “warm bath”. At this time you are not so capable to estimate adequately not only the market, but also many things around you, that are not connected with the market.
You find comments of experts in hope of encouraging words about a fast turn and are indignant, when stupid analysts do not see signs of a long-awaited turn. You are ready to look the whole nights how all other world from Japan to the United States trades. I think, it is not necessary to explain that at approach of such condition it is necessary to close simply all positions and for a while to leave the market. And it is better to make it independently, instead of leaving the unpleasant procedure to the broker, trust me, the broker doesn’t enjoy that too. If you are from the category of people who enjoy such condition, then sooner or later you will lose everything and will be engaged by search of other, cheaper pleasures, than test a pain of losses on the stock market.
As in any other niche of life foreign exchange market needs some education.
Of course, one can start forex investment and get quite successful about it. But sooner or later the losses will come. It is precisely when you might think “Why didn’t I start with a good forex trading education?”
That does not mean that after reading even the greatest materials you will start making money, but this knowledge will save you from lots of traps. And even if you decide to get the assistance of a managed forex accounts service, still you will be able to make a much wiser decision.
And a final piece of advice – today the online technologies give you a truly unique chance to choose exactly what you require for the best price on the market. Funny, but most of the people don’t use this chance. In real life it means that you should use all the tools of today to get the information that you need.
Search Google or other search engines. Visit social networks and check the accounts that are relevant to your topic. Go to the niche forums and participate in the discussion. All this will help you to build up a true vision of this market. Thus, giving you a real chance to make a smart and nicely balanced decision.
And also sign up to the RSS feed on this blog, because we will do the best to keep this blog tuned up to the day with new publications about Forex currency trading.
