"Follow the news" psychology is one of the most common weaknesses. The traders react on the breaking news aggressive and fearless when the charts show market movements. They want to be the first to enter but they are nervous too: others might be profiting from the news while they are still not. Definitely, following the trends is the #1 rule but it does not mean that you have to be the first to enter the market when trends are changed.
In many cases the news does not mean the forecast for trading. You have to analyze very carefully if it has an impact on the trading prices. More often than not, these data are false alarms and will put you in a losing position. In fact, many experience traders believe that you should not "trade the news". You should trade the numbers that is the markets. The market knows everything and will or will not react on the news. The human logic and the logic of the evolving markets us different.
Therefore, overcome your impatience to enter first. You have all the time to analyze what would be the impact of this breaking news and then you enter the trade.
Greediness is another feature which traders have in common. Do not forget that the Forex is the largest market in the world. You you can have an annual profit of 10-50% which is good already. But most of the time, these figures are not enough for traders. They want double and triple the profit and finally at the end of the day, they end up losing. Remember that forex is not gambling, learn to be satisfied with what you have. Set a realistic target every day especially if you are a beginner of Forex.
Set your target profit. For instance, 50 to 100 pips. Upon reaching the target, stop, have a cup of tea or lunch. A good enough profit is better than losing more.
Forex trading is not an easy business. It is complex which has a lot of factors which dictates the daily prices of the market value. Remember that in reality, many traders are losing. You can never be sure that you will earn profit just by looking at the trends. Cautious analysis, overcoming “gambling psychology” and greediness is a good foundation for your trading.
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