In your trading life cycle, at some point you will feel greedy and over confident about your decision.
For example, when you enter a trade. You think is definitely going up/down, therefore, you enter. But when the price goes against you, right now you want to enter more to average down your cost per share.
In my trading experience, for every beginner they should not do so. Instead, try to stick with the current position, and if the price and volume shows that it doesn’t go according to the direction that you desire, then cut loss.
Many traders burn their account capital just because they adding their position and exposing too much risk in one trade and incur huge losses.
Most of the time, traders being at this situation they will start to look into a longer time frame to convince themself that the price movement will change to their desire direction.
Initially, they are just looking short term capital gain, but when they added more position and more losses shown in their portfolio, they start to shift their focus into longer term in order not to cut the huge losses they have now.
The above action is more towards the traders are not realizing their wrong decision and put bigger hope on their trade. They will consistently tell themself that the trade will turnaround someday, blindly believe that their decision was wrong.
Financial market is not a place where you can put your ego first.When you are wrong, you can’t do anything to turn it around. This is a place that will crush you if you fail to learn your mistakes.
We often encounter questions like, what is the probability of your strategy? Does it work? What is the ROI in one year?
Before we answer you the above questions, we would like to know one thing from you. How discipline are you in controlling your emotion and act according to the market and not deciding based on your feelings?
If you can do the above, we can make sure you have the rate of return like us (50% in 7 months), works really well in identifying the entry and exit better than every analysis in the market and able to avoid any bear market and move in to the starting of the bull market at the right timing.
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This blog is for educational purpose only. It is not and advice or recommendation to buy or sell financial instrument. Viewers and readers are responsible on your own trading decision. The author of this blog are not liable for any losses incur by any investment or trading.