Not Every Trade Makes Money

May 9, 2013 in Forex Strategies

How true it is, not every trade does make money.  Traders, after analysis of various inputs, reach a conclusion, and enter the trade.  The analysis can include a myriad of inputs.  Initially, most traders tend to rely on technical analysis, probably because it is easier to get a rudimentary grasp on the markets behavior.  Since price action, as portrayed in a charts, is the summation of many different inputs, this is a logical starting point.

Sometimes we look at a chart, and envision a formation, and conclude the price will go to a certain objective.  Accordingly, a position is taken, and the result is profitable; this leads to confidence and interpretation of other formations.  And, yes, we all know how this ends.  Making money on our first few trades can be costly.  We think we are a trading natural and then losses occur in both our money and our confidence.  It is time to go back to the analysis room.

Then it gets confusing.  There are so many inputs from so many different sources.  Markets can be driven by fundamental economic events, news releases, various central bank policies, and most of all fear and greed.

That’s why resources like ForexAbode.com and ForexRazor.com are so important (and free): there’s a world of a difference between gambling and risk-managing your ‘wager’. If you are going to survive as a trader you must learn, as they say in the song “when to hold them and when to fold them.”  Further, you must examine what caused you to initiate the trade and then learn from your losing trades.

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