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How to get rid of Trading Mistakes ?

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  • How to get rid of Trading Mistakes ?

    It is essential for any trader to understand and accept that they do make mistakes and more importantly, their trading rules are not always 100% right !
    But Yet again, there are alot of traders who start with the best intentions like being disciplined and not get emotional, but eventually fail.
    It is important that we all should possess the mental strength to stock to it. In order to understand why we violate our own trading rules.

    The Human Mind

    The human mind consists of two different parts. The first part is the so called conscious mind. This part is responsible for the actions and decisions we are consciously aware of. If you analyze a chart and arrive at the conclusion that the specific currency pair is “a buy” than the “conscious” part of your brain was at work.

    The second half is the “subconscious” or “unconscious” mind. This is the “deeper” part which can process thousands of different information at the same time. You are not necessarily aware of the fact that the subconscious mind processes this information. In this part of your mind all the experiences and beliefs you acquired in your life are stored – like data is stored on the hard disc of your computer.

    You do not actively control this part of your mind – it is like a plane flying on auto pilot mode. When you drive a car for a couple of years most of the decisions taken while you are driving are generated by your subconscious mind.



    While your subconscious mind can be sometimes helpful in certain trading situations it can also sabotage your trading due to counterproductive beliefs or previous negative experiences. Many “good” decisions in trading are contrary to the human psyche. For example to cut losses short and let profits run. I have discussed this in an earlier article.
    The good news is – you can practice mental strength which is necessary to stick to your trading rules. You can make the subconscious mind help you in trading if you create new positive trading habits… – by eliminating the old bad habits.

    Small Steps

    You should stay away from overly ambitious goals for your trading. It is rather unrealistic to double your account every month. If you set yourself small goals every day you increase your chances for success. Your parents have probably raised you in the belief that you should work “hard” for your money. If this is the case your subconscious mind will not let you make huge profits in any case because this belief is stored deep down in your brain.
    Working on small goals (single trading mistakes) at a time will very likely lead to better results than overly ambitious goals. Let’s say that you analyzed your trading results over the last few months and you realize that your biggest losses were due to the fact that you did not honor your initial stop loss.
    Something went wrong here – the decision of your conscious mind to place an initial stop loss at a certain level was somehow sabotaged by your subconscious mind which made you change that stop shortly before the order was triggered. You need to re-program your subconscious mind in order to get rid of that costly mistake. You therefore decide that during the next four weeks you will work on honoring your initial stop loss order. This is your goal now which you will focus on.

    Associate Actions with Events

    Every time you achieve your goal of honoring your stop there should be a small reward. You should program your subconscious mind in this way that you associate pleasure with achieving your goal – even if you were just stopped out with a loss. To the contrary you should think of some sort of “punishment” every time you changed your initial stop. This can be taking yourself out of the action for a while and force yourself to take a short walk each time you fail to stick to the plan. It also helps to think and reflect a bit upon what happened.
    This technique will also prevent yourself from making ****** trading decisions out of frustration and will also program your brain that you will have to take a short walk every time you are not disciplined.
    .

    Repeat the Process
    In order to (re-) program your subconscious mind you need to repeat the process. Do not interrupt the procedure even for a single day. If you repeat the process for four weeks in a row your new trading habit will be internalized and you will have improved as a trader. You should approach every trading mistake with that same procedure. First identify and single out the error and then work on eliminating it.

  • #2
    Time and money

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    • #3
      Mistakes is inevitable in forex you can only minimise its occurrence by experience and gaining proper knowledge.

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      • #4
        nice share...

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        • #5
          Human is friend of mistake and error, they can't be separated. Just keep making many practices and it will make you more talent in trade..

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          • #6
            Originally posted by danzfx View Post
            Human is friend of mistake and error, they can't be separated. Just keep making many practices and it will make you more talent in trade..
            we just have to learn the lesson given to us...

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            • #7
              good read, It all comes down to how decided you are, perseverance and dedication. mind over matter, there is no enemy in forex except your self

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              • #8
                I have been playing around with forex for the past eight months and have come to realize that quite a lot of traders haven't the faintest clue what a trading system is. But like the old master Yoshi " you do not need a weapon to do battle with. You become the weapon". So my dear fellow traders " a trading system is you". You become disciplined, chose when to enter a trade, exit a trade, manage your money, and the list goes on. The best trading system is you!

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                • #9
                  good read.. thanks for sharing!

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                  • #10
                    Originally posted by maligno View Post
                    good read.. thanks for sharing!
                    if you have another tricks please share...

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                    • #11
                      mistakes can be reduced only by practice

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                      • #12
                        Cease the frivolous postings new guy
                        Last edited by FloridaTrader; 04-09-14, 23:21.

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                        • #13
                          You will never reach faultless trading, because it is impossible in trading. You have to resign yourself with the fact that trading is a line of profitable and negative trades (of course second type of trades should be minimum as much as possible. Widespread trading mistake is overtrading which happend where often in my past trading experience. After realizing it I just moved to bigger lots in my OctaFx trading account and reduced the number of entries to 2 in a month. It greatly helped me to stay cool and entry market only when I sure for 80-90%

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                          • #14
                            Originally posted by Gad View Post
                            if you have another tricks please share...
                            I dont know if this would help, this is what i used to do when i first traded forex, I used sticky notes to stick on my monitor, some are things to aviod and others are things to look out for, its more of a "changing the habit" thing, it takes determination or a simple redundant practice. its will power, since most mistakes are due to emotions if you ask me

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                            • #15
                              No frivolous postings allowed...again
                              Last edited by FloridaTrader; 25-08-14, 22:30.

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