Many forex traders make a fatal mistake by relying too much on market predictions. They believe they must be right at least 70 percent or even 95 percent of the time to profit. However, the need to predict the market often arises from the desire to be right, which can actually be a dangerous trap. On the other hand, there are successful forex traders who do not overly rely on market predictions.
Here are some keys to their success:
- Following Signals from Trading Systems
Successful traders do not rely on their own predictions but follow signals generated by their trading systems. They believe in the rules they have set and adhere to their trading strategies with discipline.
- Stop Trading When Wrong
They have the courage to stop trading when the market proves them wrong. This means they are not trapped in emotions and are able to manage risk well.
- Letting Profits Run
Successful traders do not rush to take profits. They let their profits run as much as possible, thus having high positive expectations.
- Seeking Opportunities with Controlled Risk
They look for trading opportunities with positive expectations every month while minimizing the likelihood of monthly losses. They are not overly fixated on prediction results but focus on risk management.
- Understanding Lot Management Well
They understand lot positions very well, so they can still trade even when they make mistakes and make big profits when their predictions are correct.
Why Do Predictions Often Fail?
Market analysis often fails because it relies too much on predictions. Even highly paid Wall Street analysts often fail to consistently profit from trading. This is because market predictions are not always accurate and can be influenced by various external factors that are difficult to predict.
The Key to Success in Forex Trading
Instead, focus on good risk management, set short stop-loss orders, and manage risk carefully. When you understand these principles, you will have more opportunities for success in forex trading. So, it's not predictions that are the key to success, but rather risk management and discipline in following your trading plan.
Avoiding too many predictions and focusing on good risk management is the key to success in forex trading. Don't get caught up in the mindset that you have to be right in predicting the market to profit. Instead, learn tested trading strategies and follow them with discipline, while managing risk carefully. That's the secret key to success in forex trading.
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