The charts and the price tickers are humming all the time. So why sleep if there is a trade opportunity? Maybe there is one. You go to your computer and you see one. But is your high profitability setup really there?
Perhaps there is a good setup awaiting you, but there’s a very good chance that you don’t want to miss out on being inside, even if it’s not worth it. If you’re lucky, the result is only a big waste of time. But it can also lead to very unnecessary losses.
Here are the some of the reasons for such moves, and what you can do to avoid them.
- Too much screen time: When you’re attached to the charts all day, and sometimes late at night when everybody is sleeping, you might start seeing things. Did you happen to bend some lines on the charts? Round some corners? If you see every small move as a big event, you might be missing out on the really important ones, and taking the absolute wrong decision.
- The feeling that you’re missing something: You’re not missing on anything if you miss out on a bad trade! The feeling that you must be in the market in order to gain may turn out absolutely wrong – you may lose your gains by being in the market at the wrong time. The need for action can turn into more losses.
- Now you’ll show them!: You think that after you’ve spent many hours by your screen and burnt some money on the wrong trades, you’ve learned and now you’ll take revenge. Well, you’re not only exhausted and overwhelmed by all your trades, but the feeling of revenge is also harmful and in many cases leads to final burnout of the account.
So, take a break.
And in more detail, allocate time for checking out what you did and for education, and separate time for trading. Make these time frames fit into your life, and not take over them. It doesn’t mean you’ll never lose again, but it will make your decisions much more rational, and each position will be carefully taken, and not impulsively made.
Further reading: Stop moving your stops.Get the 5 most predictable currency pairs