In this article we explain why it is important to trade try to make money trading FX slowly. It is possible to make quick profits but it can lead to big losses.
Below we will introduce reasons why less is more when trading FX.
Trade quality improves
1st benefitFocusing on trading only a couple of times a day naturally makes you want to wait for the best trading opportunities. If you lose on your first couple of trades, you will have to wait until tomorrow for the trade to recover the loss. The fear of losing can improve your ability to wait for the best trading opportunities.
Increased patience allows you to spend more time monitoring the market before entry and gain an understanding of the current market situation. Avoiding poor trades is one of the easiest ways to improve your performance. As soon as you find a good trading opportunity be ready to enter quickly.
Less revenge trading
2nd benefitWhen day trading FX, it is very easy to make many losing trades as a result of revenge trading. All traders are disappointed after the loss and many traders will try to recover the loss too quickly. Revenge trading results in poor trade planning and a high chance of further losses.
By reducing the number of trades per day it is less likely you will revenge trade. Following a loss only enter the market if your strategy has a trade signal. After a loss it is usually best to take a break than rush to trade again.
Trade mistakes are reduced
Third benefitIn trading, only one bad trade can result in a big loss and result in your account balance going to zero. By reducing the number of trades, you are less likely to make mistakes and you are more likely to make steady profits trading. By trading less you can spend more time analysing the market.
Being well prepared and relaxed allows you to focus on fully adhering to the rules. Spending time watching the market rather than always holding a position will allow you to better set a stop loss and target to match the market`s current condition.
Become an expert
Fourth benefitBy reducing the number of trades, you are more likely to become an expert in one market and strategy. Trading the types of trades every day your knowledge of your strategy will increase and help you find ways to improve your performance.
For example, one strategy could be to trade a range trading from 10am to 12pm London time on the GBPUSD. Through having a more narrow focus you will better understand how you can find profitable trades between 10am and 12pm.
Stress is reduced
Fifth benefitTrading can be stressful due a constantly moving market and the chance of making a loss. No matter how good a trading opportunity there is always the risk of making a loss. By reducing the number of trades, the stress level will decrease making easier to trade more successfully.
Each time you trade you stress levels can increase so it is important to be selective when you trade. There should be no pressure to trade as pressure increases the chance of making a poor trade. Increased motivation
As your performance improves you will begin to realize that the key to making more profits is not to trade more, but to trade in larger positions. Using a trading strategy that trades less often and with a larger position size will motivation to trade.
Final advice
When trading Forex is best to try to make steady profits over the long term. Taking excessive risk and trying to make quick profits usually results in gambling and losses. Be patient and focus on making well researched trades every day rather than worrying about short term profits.
This article is for educational purposes and not meant to be advice.
