We can witness the rise and fall in markets commonly. It is crucial in some ways, but it may also result in excessive loss of money if we try to trade everything.
There are some errors quite common like trading intra-day price variations or withdrawing a cost-effective trade simply because the market started retracing against your situation. These kind of faults result because of giving unnecessary importance and effort to the regular price variations in a market.
It is well known that less is more in trading. We can emphasize on the importance of this fact by notifying few key points about market dynamics, price action and how not to react at every fluctuation in the market.
The first and the foremost thing you need to do is accept the fact that stopping a “freight train” is a pretty tough job. A freight train in trading refers to the trends with a lot of momentum behind them, for example, if you look at the charts, you’ll realise that EURUSD, USDJPY or AUDUSD have long multi-month trends in them. It is not common for these trends to alter directions quickly or easily just like those freight trains.
Don’t Go Against the Trend
Hence, those short movements in these markets don’t really matter that much and reacting at these movements will be a bootless errand. Make the trend your friend, you can do this by not going against it every time the market fluctuates. Again coming back to the “freight train” reference, a trade in a huge market can pretty easily run you over if you stand in its way. Traders usually make this mistake of getting in these big-time trade’s way and get crushed.
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