We often focus on the technical side of trading, following people who make accurate forecasts or predict the resistance or support zone precisely.
I used to spend a lot of time on charting apps like tradingview, hoping for the best price to open a trade, but I am still a losing trader.
Technical analysis are important but not enough to make you a great trader…
I concluded that in order to be a great trader, it is more about controlling your greed.
How I bust my forex trading account(s)
I often fall into this horrible trap of trading: I have a view on a market, and there is a price target on a broader timeframe (daily or weekly chart).
- I trade H1 and H4 mainly
- The market is now at the bottom zone of a recently trading range. (and turning around)
I begin to look at the price targets..that could be 800-1000pips ahead.
With my view on the market, I tend to accumulate more positions at this lower zone of the range.
I am swiped out on some retracements at the H4 timeframe and bust the account.
Market then moves to my original price targets.
Why? Fear of missing out
The market takes time to complete the bottom pattern and I am heavily leveraged.
I was too hurry to enter the market, and too optimistic about my view. For just one outside bar going up, I confidently believe it is the breakout..
The market wasn’t ready for the prime time, it was just my view, not the market’s view.
So, I was trading my market but not the actual market in reality.
Lessons I have learnt, and your take aways
- Market usually take time to turn around, and it is often longer than you expect.
- Greed is good only if it is in control – implement good risk control, you can enter back the market anytime.
- If you trade, stick to a timeframe. Don’t look further.
- Always make clear to yourself: market is the big boss, not you.