When you have interested in knowing what is Forex and how it works, you've probably noticed the great potential of this huge market. It is very likely to see us motivated to invest in the Forex, but the simple fact of knowing a trading technique is not enough to achieve results in the foreign exchange market: it is necessary to know and apply a method.
We can define method to the set of rules necessary to achieve an objective, an end. But what does a trading methodology?
Having already own rules that allow evaluating whether to enter strategies, and how to market, is it necessary to also program other to operate?
Let us start with the definition of method and see what the purpose of a trader.
Purpose and Method in Trading
The reasons why someone is interested in financial markets, not only in the Forex depend on each individual.
For some the answer to the question: what pushes you to do trading? it could be because you like the graphic analysis, perhaps for another reason finance and markets have always fascinated him. Others might even say that because they do not pollute (working at home without having to drive), or the color of the candles.
But beyond the personal reasons that each trader approaches the market, the ultimate and common goal for all is to obtain an economic input that allows you to increase your current account.
What we do know is that there is a purpose there is a reason why we look at the charts, study techniques and ways to use the market, make decisions and manage risks.
Having accepted that the ultimate aim is to maintain our profit curve upward trend and, therefore, be productive in the long term, the question arises spontaneously: How can a trader pursuing this goal?
Operability and MethodIf the trading consisted only of applying a known technique, it would be the easiest job in the world, I think in that we all agree.
Currency trading or any other financial instrument is made of colors, there is never a typical situation, rather than in the manuals.
Therefore, it is important to know the techniques, but it is equally important to know how to apply them in the market that is changing over time and even more, knowing when to stay out of the market. A good strategy we can report profits to investors? Or to be profitable in the long term if we act consistently?
Psychology and MethodIn addition to the technical characteristics of a chart, the trader must also manage the characteristics of the character.
Emotionality is an overwhelming factor in the behavior of a neophyte trader. Often it tends to act instinctively and very objective manner. Convinced apply the technique, does not see that market conditions are not right for that time or that specific technique.
In other cases it is the expert trader that will influence operational periods with low and leave you about to give up, rather, to modify its operating style. Because the Stop Loss undermine confidence in ourselves and in our own knowledge.
That is, it is essential to have rules that bound our way towards the goal we have set. A kind of track that will lead us towards the end.
The Importance of Having a Trading MethodEverything written so far it follows that, spend time build us a proprietary method, is an investment that provides the following advantages:
Being productive long term
Respect the rules
Act on emotion and psychology
Discipline
Security in our technical and ourselves
less stress
This list of benefits can not be complete, is more, I encourage you to do the exercise extend you so that you do reflect on the benefits of owning a proprietary method, but they are all the main points.
We understand that not enough to know what is Forex and how it works, serves a method, and this, a proprietary method, is built with time, practice and, above all, perseverance, keeping fixed the main essential rules in the trading and learning to know ourselves. As athletes do.
For now it is all. Hope had given you a good point of reflection to improving yourselves and improve your trading activity.
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