Are you still losing in trading?
When it comes to trading, especially when you are a beginner, there is this misconception that the more you trade the more money you can make. This is understandable, as we are conditioned to believe that more is always better. However, trading in FOREX and Crypto markets, less though targeted activity is preferable and more profitable.
Evidently, the belief about extensive trading stems from poor understanding of the law of averages. The adage goes, more you trade – on the average you will have more successful trades than not, and you will have a net positive outcome in the end. Nothing could be further from the truth. Trading more frequently without a trading plan or predefined trading limits, and solely based on emotions is OVERTRADING, and it could be gravely hazardous to your financial health.
Could you be overtrading?
With the advent of supercomputing, the daytime online trading has become vogue among the millennials, young professionals, and often retirees. They spend hours – often in front of their computer screens – executing trades in the hope of making a profit. Their decisions are mostly governed by emotions, rumours, and impatience. If you find yourself, spending more than a couple of hours in front of the computer then you are overtrading.
On the other hand, most experienced traders are patient, plan their trades in advance, and execute a trade only if their analysis supports it. They do their homework through Forex Market studies, they are agile about following through ESB and/or FED statements, and in general have a global perspective of the equity markets that comprises: equities, FOREX currency pairs, cryptocurrencies, commodities, and even precious metals. They are cognizant of forces that drive these markets, and understand the interplay between them.
You could be overtrading, if your trade entry and exit points in trading are NOT based on these rational non-exuberances!
How could you actually get to the same level as the successful traders?
There is a process that will help you avoid overtrading and lead you to become a successful trader. Let’s list them here:
- Trade only off the Daily timeframe,
- Plan your week and stick to your plan,
- Have a Daily and Weekly profit/loss limits, and
Focus on the larger picture as outlined above.
Trade only off the Daily timeframe
Professional traders act only on supply and demand. The idea of trading smaller timeframes, ranging from 15 minutes to even an hourcould lead you to enter or exit positions that are disastrous. In addition, it trains you to think like a ‘Serial Over trader,’ whogets in and out of a trade every 15 minutes or an hour.
In contrast, here at Platinum Trading Institute (PTI), we teach our students the concept of supply and demand and show them the importance of understanding that timeframes do not even exist. Understandably, to trade without the time frame could be a foreign concept to you, though at PTI, we know that it is the only successful approach to FOREX and Crypto currency trading. We still value the concepts of indicators, oscillators, Bollinger Bands, and simple statistical approaches like moving averages or advanced Hull moving average etc. But, we use them in the reference of daily, weekly, or even monthly time frames.
Thus, we trade rationally, more efficiently, and certainly much less frequently.
Plan you week and stick to your plan
The best way to help you start trading less is to plan your week in advance. Here at Platinum Trading Institute (PTI), a group of our ace traders collectively carry out the detailed analysis on Sundays afternoons, and post their recommendations for our clients on the Platinum portal by Sunday night. In general, we stick to the plan for rest of the week – though update it as required by the daily news and/or financial event. For example, we pay attention to events like, US Non-Farm Payroll (NFP – report) report and update our recommendations as needed.
However, we mostly stick to the plan even if the market has moved away significantly from our original recommendations. A salient trait of a successful trader is that – he/she creates plan and religiously executes it through the week.
Have a Daily and Weekly limit
Having daily and/or weekly limits on your trading activity is one of the most critical trait that a trader can develop to be successful. These limits could be on: (1). Number of set ups a week – say three or four entry points, (2). Loss limit on an individual trade as a number (of pips) or a percentage of the trade lot size, and finally (3). Overall daily or weekly loss as a percentage of the total portfolio value.
Often, it makes sense to set a limit on winnings also. This could be daily number of pips or the percentage of the overall portfolio. I have seen many a traderwinning significantly in a trade, and giving all that and more in a greed driven incorrect trade call.
When you acquire this discipline, then you will start seeing your FOREX or Crypto currency portfolio gaining momentum, and becoming profitable.
Focus on the larger picture
Online FOREX and Crypto currency trading have led many a trader to have irrational expectations, and they lose the sight of the fact that FOREX and/or Crypto currency trading is a serious business. You might get lucky, though that success would be short lived, and chances of a major failure are high. If you decide to venture into FOREX and/or Crypto currency trading then treat it as a business, and as such: (1). Set long term trading goals, (2). Develop a weekly trading plan that is consistent with your goals, and (3). Religiously execute that plan with minor modifications as needed.
Once you have developed this discipline, I am confident that you will be a successful trader as many at PTI.
Is there a way you could accelerate a bit on this process?
There is a way by which the process can not only be accelerated but be made less stressful. As outlined above, the salient factors that contribute to trading are self-discipline, patience, and an intense desire to succeed. Although, those need to be augmented by professional and knowledgeable coaching, weekly mentorship, education, and par excellent training.
That is what we offer here at Platinum Trading Institute. We have experienced traders who are excellent coaches also, we provide daily trading floor, daily market analysis, and albeit the Platinum Television (PTV) that walks a student through intricacies of daily charting.
If you would like to know why this would be the case, get in touch with the Platinum Team today, and we will be happy to help and explain the trade.
HOW TO BECOME A PROFITABLE TRADER.
If you are a new trader and would like to learn how to trade, then sign up today to our 2-day free Foundation to Forex Trading Course. We have just introduced this as in the last month we have had a lot of inquiries on learning how to trade the financial markets. We can get you on the successful path of becoming a Financial Trader.
Hopefully, you have enjoyed today’s article and have gained great knowledge about trading and how to trade.
Perfect Fundamentals + Perfect Technical Analysis + Perfect Logic + Perfect Risk Management = Perfect Trade
At Platinum, we teach all individuals from different walks of life to become a full-time trader or create a secondary revenue stream by trading part-time.
Learn how to trade Forex the Institutional Way. We educate our clients to think like Institutional Traders and not like Retail Traders. Trading in the same style is not only more profitable but also far less stressful for the retail trader. We want you to make your trading decisions based on confirmed entry points and be confident with each trade that you make.
Wishing you all the best.
The information you’ll find in this article is for educational purpose only. We make no promise or guarantee of income or earnings. Use your best judgement and perform due diligence before using the information in this article. Your success is still up to you. Nothing in this article is intended to be professional, legal, financial and/or accounting advice. Always seek competent advice from professionals in these matters. If you break the city or other local laws, we will not be held liable for any damages you incur.