Of course all traders want them and are capable of accepting them â “ but they cant, due to having the wrong mindset and this is what this article is all about - spotting and accepting big gains.
So why is this currency trading fact such a problem to most traders?
The problem is rooted in most currency traders attitude to risk and there inner confidence and conviction.
Many traders are great at spotting the big moves, but they snatch profits too early - or get stopped out to soon.
A closer look at the reasons will reveal why.
Most traders are so obsessed with restricting risk they actually create it in two ways.
1. They place their stops to close and get stopped out by normal volatility.
How often has this happened to you?
You spot a big trend, get in and volatility takes you out - then the trade goes on to make $10, $20 $30,000 or more and your not in but you saw it coming?
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It happens to most traders at some point and some more than others.
2. They want to grab profits
When a trader gets a profit he wants to snatch or protect it before it gets away.
The bigger the profit becomes, the more volatility eats into his open equity the more tempted he becomes to take it and then he snatches it.
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The mindset you need is:
If a trade looks good risk more!
If you are trading a small account of $10,000 risking 2% is waste of time risk 10 â “ 20% and give the market room to breath â “ otherwise volatility will get your stop.
If you believe in a trade have the courage and conviction to go for it.
Get Used To Open Equity Dips
If you want to make the big profits you have to accept that you are gong to see open equity dips of thousands per day â “ thatâ ™s just the reality of trend following.
Capital controls a right move, says Dr Mahathir::
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Swing Trading Articles 04-Oct-2007::
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Look at past instances of big trends and peak to valley drawdown and mentally prepare yourself to take these dips.
There not nice to take!
However keep your eyes on the bigger prize and comfort yourself with the end result.
You need to keep your stop loose not tight to do this â “ if itâ ™s to tight volatility will simply pick your stop and take you out.
Currencies trend long term as they reflect the underlying health of the economy and the way to make the really big profits from them is:
To follow them - but this means steeling yourself to ignore short term volatility.
The only way you will do this is:
If you have rock solid confidence in your method to succeed and this means not just following someone else but understanding the system you are using why it will win longer term.
If you donâ ™t have inner belief and confidence you will never ever follow these trends.
The fact is that making big profits is mentally hard and comes from confidence conviction which leads to discipline â “ if you want to catch these big trends when others donâ ™t bare the above points in mind.
Sure itâ ™s an uncomfortable ride - but comfort yourself in the fact that if you take calculated risks, at the right time and accept risk and drawdown as normal, you will catch the best profits from the longer term trends.
Look at a forex chart and you will see these trends moving for weeks, months or years, have the courage to go for them and accept the massive profits they can provide you with.
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Currency Trading Fact â “ Most Traders Cannot Accept Big Profits!