3 Causes of Failure to Achieve Forex Trading Targets
Maybe I have revealed it often enough through writing or seminars, webinars, or workshops that I bring about that what matters most to a trader is not the result, but the process.
OK, it might sound too idealistic, but like it or not that’s the point.Because in the process, a trader must have at least enough knowledge and discipline. A disciplined and experienced trader can easily anticipate any market movements that are not in line with his expectations.Without these basic things, it is impossible for a person to suddenly become a competent trader. Knowledge, experience and discipline require a process.
More important is the process of making trading decisions. A trader does not make a decision by calculating the number of buttons on his shirt. Not based on the zodiac prediction. Nor is it based on feelings.Trader, how come it’s baper …
Based on experience, too, I can find that there are many factors that can cause a trader to fail in achieving his targets in forex trading . Three of them are the following:
- Don’t have a clear trading plan
Please set the target as high as you want, but remember that targets without clear planning are the same as dreams.
Make targets based on a well-planned trading plan. The more detailed your trading plan, the better. Enter details such as risk limitation per transaction, the strategy / trading system used, to the strategy in the form of risk management tools that you will use (cut loss, switching, averaging and so on).
- Not running a trading plan well
Many traders are so excited when preparing a trading plan but are slack when implementing it. Finally, the trading plan that he made was only a “monument” whose fate was similar to the resolution of his new year he made with enthusiasm towards the end of the year, but finally forgotten.
So, after you have compiled a trading plan, do it with discipline even to the “small” things. Do not make the slightest violation of your trading plan because it will become a habit and in turn you will become increasingly permissive in denying the trading plan, so you will be accustomed to committing violations that are fatal.
For example, a trader has determined that the risk per transaction must not be more than 10% of his capital. Suppose he has a capital of $ 1,000, the risk for each transaction he does must not exceed $ 100.
One time he saw a trading signal based on the system he had. With the position size calculation, say it should only open 0.1 lots. But at the time he felt confident that the trading signal he saw was very accurate, so he was tempted to open a bigger transaction, for example 0.5 lots, with the ideal he could get a bigger profit.
One of the reasons why risk needs to be limited is to avoid too large a risk. When the Trader decides to open a transaction of 0.5 lots with a SL limit that does not change, that means he allows his capital to face a greater risk than it should.
This behavior tends to be repetitive and when the Trader realizes his mistake, it is usually too late. The end has come.
- Not used to making trading journals
This is the most frequently ignored trader. You should record every thing that is related to the transaction you are doing. You should make this record every time you make a transaction.
You can fill in your journal such as this:
When the transaction is closed, also note the results (profit or loss, no need for details until the amount of profit / loss is already in Account History). Also note what might cause your transaction to end profit or loss.
A journal like this will really help you in evaluating your trading results. If your total transaction makes a profit, you just repeat what you do.Conversely, if the results lose, you can know what causes the loss so that you can avoid it later.