The problem for inflexible minded traders is that the markets they trade aren't rigid. They do trend, but they can turn the other direction leaving a rigid trader with a hard decision to make... To stay and hope the market will rebound or to get out and cut loses short.
Part of this stubbornness in a trader is the obsession to always be right no matter that the evidence proves they are wrong. Such a trader may even know they are wrong but still insist otherwise. They have a hard time admitting defeat and don't want to lose face.
Until something catastrophic happens, for example getting a margin call, these rigid thinking traders will not change their set in stone beliefs.
You may be one of these traders and don't even realize it. Having to be right just overcomes your ability to think clearly. Rigid thinking prevents you from taking corrective action on your trades so you can cut your losses and be ready for another opportunity, whether it's reversing directions from long to short.
Be determined not to have a rigid view of the markets. Being flexible in your thinking is better than being right about the direction of the market. They say the market doesn't care what you think. It doesn't matter if thousands of other traders agree with your view... The market decides which direction it will go.
The only belief you should hold is that you must be flexible and adapt to change.
Copyright © 2009 L Chan
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