Trading with the Set and Forget Strategy is as simple as its name suggests.
Trading Forex with the Set and Forget Strategy is as simple as its name suggests; you just “set” an order and then “forget” about it for a period of time. This approach has two main advantages: it is much easier to maintain emotional discipline, but it also allows you to lead a “normal” life without spending hours in front of the computer and constantly analyzing the markets …
It often happens that novice traders are overwhelmed by the amount of data flowing from various financial media on the Internet or television.
It is then extremely easy to experience a kind of “paralysis” when analyzing and trying to trade in Forex or any other financial market. There are truly countless competing trading ideas where it can be overwhelming to even try to make sense of it all and develop a plan based on that amount of information.
One of the biggest psychological flaws faced by aspiring traders on their path to success is a deep belief that the amount of economic data analyzed and / or having a technically complex or expensive method will help them be profitable in the market.
However, as many professional traders can attest, the reality is that the number of factors taken into account tends to have an adverse effect on the profits made. This in turn means that once we have analyzed a certain amount of market data, the next time we spend analyzing that data is likely to negatively affect our trading, causing us to lose money.
Why is analyzing too much market data counter-productive?
It may seem a bit confusing or counterintuitive to a novice trader when he first hears about how analyzing too much market data can actually result in losing money faster than it would otherwise be. Believing that “more is better” is a psychological trap that keeps novice traders away from profits and is the reason why so many of them clean their accounts and eventually abandon the profession.
The main reason for this is the innate human need to feel in control of their lives and their surroundings. It is an evolutionary trait that allowed our species to survive and eventually brought us to the modern level of civilization we are today.
The unfortunate thing for aspiring traders, however, is that this genetic trait works against them when they try to trade Forex successfully. In fact, most of our normal feelings, where we want to work harder than others or spend extra time better researching what we are doing at work or at school, doesn’t work at all in trading.
So the underlying cause of Forex beginners’ failure is the thought that makes them feel a psychological need to control their environment, and when this emotional state meets an unmanageable environment like the Forex Market.
It almost always has a negative effect. consequences. This problem works like a snowball, because when a trader makes a loss on several trades, he starts to get angry and wants to “come back” to the market. The way it does this is by reading another trading book, or buying a system that seems to “perform better”, or analyzing internal reports on the performance of any economy that they can find to predict how your chosen factors will affect on market movements.
Once such a process starts, it is very difficult to stop as it seems to make logical sense. After all, if we spend more time and do more, we will finally find out how to make money faster in the market. The hard truth is that, as stated before, after gaining some degree of understanding of technical and fundamental analysis, further research or “tweaking” the system beyond this point actually works to our disadvantage and the pace at which you learn more and more subsequent research is likely to be the rate at which you will lose your money in the market.
So how is a beginner trader to consistently make money from Forex trading if we are genetically conditioned to overcomplicate? The first step in this process is simply accepting the fact that you can’t control the untamed Forex market and leaving your ego at the door. The market doesn’t care what you’ve done in your life before; he has no emotions and is not a living being. It is an arena where people act on the basis of their beliefs about the rate of a particular currency pair.
These beliefs stem from emotions, and human emotions are very predictable when it comes to money. The point here is that the people I mentioned in the previous chapter doing extensive research and trying to find St. The grail are those who try to control the market, and therefore traders based on emotions. These people have predictability that professionals can use to gain an advantage over them.