You are overthinking Forex for a Living! It’s great to be a well-schooled Forex technical analyst. It makes great conversation at parties, assuming you only go to parties with other well-schooled technical analysts. But unless you’re going to be a teacher, all that knowledge doesn’t mean anything unless you apply it to trading Forex for a living. In this case, a buy or a sell. It takes action.
Theories are just that until they are applied to practical applications. You can view your points of resistance and support all day, but there are few perfect markets. So sometimes, you have to take a shot if you want to trade Forex for a living.
Assuming you’re not a scalper, you don’t need those razor-sharp reflexes of a scalper to get into or out of a Forex market. However, even if you are a Forex day trader, you are a day trader. Don’t be a daydreamer. Your income from trading Forex for a living depends upon you acting in an actual trading capacity in the Forex market. If you’re overthinking a strategy, you’ll be, as they say, “caught looking.” Overthinking Forex for a Living
Missing Forex Trades – Overthinking Forex for a Living
You’ll find yourself staring at the trade you should have made but were too busy thinking about it, and in the meantime, the now fictitious business you created is making real money for someone who executed an order. You don’t need the reflexes of a scalper, but you do need the courage to take action. You don’t want to join the “woulda, cudda, shudda” club.
These people spend too much time lamenting the trades they ‘would have’ traded, the works ‘they could have’ changed, and the businesses they ‘should have’ sold. On the upside of this method, they don’t lose money. The downside, of course, is that they don’t make any money, especially when trading Forex for a living.
Overthinking Forex for a Living
Preparation is critical, but it is not an end. Your personality will contribute to your Forex trading as much as your technical and fundamental analysis. Don’t rely too heavily on one method. You will be overwhelmed with too much information, leading to being frozen.
Overthinking Forex for a Living
Sure, there are Forex traders who don’t think enough and act too much out of impulse. These people are apt to lose money to the same extent as the other extreme. The difference is in the explanation of the loss of money. The Forex trader who acted impulsively will shrug his shoulders and say, “Hey. I took a shot.” At the same time, the Forex trader who overanalyzed the market and lost money will point to his charts and give you several reasons for the loss. The result is the same: one you don’t want to be in.
Look for a balance. Information is beautiful; don’t let it get in your way when trading Forex for a living.