Why Feeling "Overconfident" Will Kill Your Aspirations To Succeed In Forex Trading

When it comes to getting used to ‘forex trading’, many are aware that this is not an easy game or job, even scary statistics like 95% of traders fail and only 5% succeed, are always touted. However, some decide to try this new job after losing a job or maybe while still studying.

For those who are still studying or single, it may be quite easy because there are not many commitments like those who are already married. For those who are working, it can be a part-time job and generate a little income to 'cover' kitchen expenses or car money.

But there are also those who have just quit their jobs and with a little VSS money, start a new career as a ‘forex trader’. Start their arena in this forex trading.

It is very interesting to talk to traders because many are successful in the beginning as people say ‘beginner luck’. Confidence also increased after making the account $ 100 to $ 1,000. But unfortunately, success is often not long and many begin to face loss after loss or defeat after defeat. That confidence is good, but once you start feeling ‘overconfident’ and self-sufficient. This is where all the problems will begin.

Here are some things that happen when you become overconfident:

# Take a larger lot size in one trade

You have more money in your account, so you can increase your lot size and make more money. Understand, $ 100 has become $ 1,000 and greed is beginning to dominate.

The question that should always be asked yourself when trading is: is the lot taken is proportional to the size of the account or exceeds the limit? The latter may be what happens and you start taking a bigger risk than the size of the account and when the market reverses, your account MC and then ‘stop-out’.

Always think that if your account stops, you will lose business and jobs. So you need to have a risk limit in every trade. With the capital you have, ask yourself: how much am I willing to lose in one trade?

How many trade opportunities do I want for myself? For example, if you have a capital of $ 100 and are willing to lose $ 20 in each trade, you have given only 5 opportunities for yourself.

# Take more trades:

If one trades you make a profit, of course, more trades will make more profit. However, ‘overtrade’ also increases the risk for you to lose more capital.

It is true, but what if your analysis is wrong? Have you ever wondered where you would ‘cut-loss’ if you realized your analysis was wrong or you were depressed lot-size larger than you wanted? ‘Traders’ overtrade because they want to get rich quick and this is where it will be gambling.

Always think that ‘do not run the market chased’ because the market will always be there. Let it be slow but definitely successful. As white people say, ‘slowly but surely’. So make sure you only take high potential trades for-profit and limit the risk so that you will continue to have the capital to trade and work as a ‘trader’.


# Changing the stop-loss:

With increased capital, you feel you have the ability to set aside your trading rules. It can lead to bigger losses than you might expect.

When your trade is profitable, you start to think you have successfully read the market movement accurately and do not want to lose or be wrong in your analysis. So you change the ‘stop-loss’ and the situation gets worse and finally your MC account then ‘stop-out’.

Always think that no one knows better what will happen next. The situation can get worse and you need to minimize losses so that you still have the capital for the next trade. When you know you have made a mistake and do not follow your 'trading rules', admit it, and reduce your losses.

# Trade outside your normal hours:

Some say "after successfully generating $ 100 to $ 1,000 and you used to trade last night why not trade at another time?" after all it seems that you have proven successful. Maybe you can trade when the boss's working hours are not visible? - This is the danger.

Do not forget that your system may not be suitable at other times, you may be tired and that you may lose focus beyond your normal time.

Always think that every job requires focus and ‘trading’ is no exception. According to studies, those who do two or three jobs at a time or called ‘multi-tasking’, are less effective than those who focus on one job.

Create a process for you to follow in your new business and job as a ‘trader’.

# Ignore the ‘trading plan’:

After experiencing it, you may feel that you are the one who made you successful,