the daily chartist

Making a decision

published 2 years ago

 Making decisions in your life is the basis for moving forward, showing character, building relationships and growing as an individual in your professional and personal life. The right ones will show if you are on track, moving sideways, or drifting away towards something negative. The outcome of our decisions determines if we did right or wrong. Sounds like a 50 - 50 luck probability if you are in a casino. In some situations, we truly "make a bet" for certain outcomes for our benefit. Choosing your career path is 50 - 50 for you to succeed in the career path or fail and shift to a different area. Also for some, choosing this kind of living isn't suitable, isn't enough and it doesn't define them as individuals and they drift from the system. This moment occurs when they discover their inner talent in freelance areas, creating something on their own in arts, crafting, web design, programming and consulting. But recently after lifting the big limitations and restrictions for the "common folk" and the advancement of technology, brokerage business and influencing marketing campaigns, trading, has become something very common now, popular and very affordable for everyone as having as much $25 and an internet connection. Thus the "retail trader" was born. Or in other words - anyone who saved some kind of (losable) amount of money and to trade from their homes through a broker, on a margin and with some sort of a trading platform that can provide fundamental data - news, and technical data - charts and to accomplish chart studies. And of course the demo account, where everything is the same, except the money - not real.

 So you hear of this thing called "trading" and you are curious. Is it a casino? Pure gamble? Or something more complex, alive even, that requires much knowledge, experience, discipline and foresight. Is it a casino? Yeah, in the end, you have 50/50 ratio that your trade is going to succeed, even though you've spent 2 hours analysing the EUR/UD pair and making a prediction (individual one) based on fundamental and technical analysis, you can't take everything in to account, you will miss out on risk factors, you will be stunned, shocked, surprised, even devasted on the outcomes. But you've already made a decision - buy, sell it, hold it. Whatever it is. Complex, even alive system? Sometimes when you watch the charts on the most volatile and liquidate instruments you wonder how is this happening so fast as it is happening from its own as an organism. You just can't comprehend how fast orders are executed from all over the world in trillions of USD. What the chart ticks are every market participant's decision and their sentiment, which was shaped by their analysis to go long or short. Some will win, others will lose. The interesting thing is that even if the market goes in the opposite of your direction, in the end, it might actually go in your favour. And you know what quality is that? Discipline. Not to overdo it in the margin exposure and with appropriate stop loss (ALWAYS USE STOP LOSS). Also, discipline lets you stay cool, trade under pressure or wait for a certain trade to reverse. Sometimes closing a losing trade prematurely leads to the fact that the market has reversed, started to move in your direction and actually reach your predicted take profit as well. Knowledge is important and can give you a strong advantage over others. Knowing about news, statistics, fundamental data can actually prevent you from taking a trade, where others may be fooled by the market and when it goes choppy or reverse to be "killed", but you will remain alive. This was achieved by your knowledge and your discipline not to make rushed decisions and to jump in straight away with 1 lot on your $250 account with margin 1:500. 

 So trading isn't actually that much of a gamble isn't it? If you can control yourself, money and risk manage your account and be wary. When you trade you need to be in the zone. Fully focused. Today you may not make a trade, but you have another day in front of you. And you need to constantly keep that tempo and overcome the losing trades and keep a positive ration on the account so that you can be happy from the numbers. This will strongly affect your psychology and will test you between greed and fear and will determine if you are going to succeed long-term, or you will give up and leave it, blaming the Casino for your inability to control yourself. 

 As with everything in life, the outcomes depend on your decisions you make. So it is in trading. Before making the initial decision to start trading you need to make a fine judgment on your finance and in your ability to learn, focus, stay conscious and to achieve the "in the zone" effect, which will take some time and some margin calls, but it is a part of the process on your path to long-term success and satisfying profits.