Thursday, 29 November 2007

Trading With No Confidence

stocks trader
All traders at some stage during their trading careers go through a period of time, which they lose their confidence.

This applies even more to those traders who trade on Margins, such as CFD or FOREX traders. The reason is because of the high frequency in the number of trades that some of these daytraders use in order to make their profits -- and the more a trader trades the more he or she is likely to get it wrong -- and when they happen to go through a bad patch, it could really hurt their pockets deeply -- and I guess that is one of the dangers and disadvantages of being a CFD TRADER.

Recently, a CFD TRADER who happens to be a good friend of mine and I have a lot of respect for, has decided to stop trading CFDs and he is trying to take on FOREX TRADING instead -- when I found out about his decision, I was extremely surprised, as he had done pretty well at daytrading using CFDs in stocks and indices for a number of years -- but apparently he must have had a few big hits, which had made him make such a decision.

So, what should a TRADER do when he starts having a bad run and his confidence plummets?

He could do a number of things:

The obvious thing he could do would be to pack up trading for a few weeks and take a break.

But what I would do as a professional CFD daytrader, and I have done this in the past, would be to lower down my stake money to absolute minimum and cut down on the number of my daily trades -- and only trade when I think the odds are heavily in my favour -- I can always increase my stake money when I start getting things right again --- remember the market is always there for you but your money may not!

Some traders may have the opinion that the best thing to do in cases like that would be to stop trading but watch the market more carefully than before and start trading again when you get your full concentration back -- lack of concentration have cost a lot of us a lot of money in this game I am sure -- it's always best not to trade when we cannot fully focus on our trading.

2 comments:

CresceNet said...

Gostei muito desse post e seu blog é muito interessante, vou passar por aqui sempre =) Depois dá uma passada lá no meu site, que é sobre o CresceNet, espero que goste. O endereço dele é http://www.provedorcrescenet.com . Um abraço.

Rod said...

Hi,

I do not understand your message - any chance of putting it in English?

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