Trusting Your Analysis

Newbie trader, this one is for you and maybe a couple of traders who still aren’t too sure of their trading skills or whether or not their strategy still works!

Here is one thing we should always remember about the Forex markets – the Forex markets are a game of probabilities and as much as we want to win every single trade, unfortunately, it is merely impossible. IMPOSSIBLE!

Sometimes your trading strategy won’t work at all, sometimes it will work to the tee, and on other days it may but work “slightly” before crushing and hitting your stop loss (making your trade invalid).

In this article, I want to explore the various possibilities from the Fibonacci trading strategy.

Losing trade

Source – TradingView

For some traders this may seem like such a lost trade and a few newbies may have seen this go back to their stop losses and wonder how it happened But that’s just the game of trading at its finest. However, there is much more to learn from lost trade vs a won trade, and here is why I say that.

  1. You can look at the reasons you lost – maybe a candlestick formation or the overall trend of the currency pair.
  2. You can look at ways to make it better. In terms of risk, you could trail your stop loss and make an open trade risk free.

Winning trade

Source – TradingView

 

Then there are times when your strategy does work, and you can learn once again. For example, the best pairs to trade with a particular strategy and the ones to leave alone.

A trader can only find this out by trading the pair enough times to understand how it moves. An effective way to achieve this is backtesting the Forex pair.

Understand that the only way you grow to trust your process is by going through your process, time and time again. Rinse and repeat… over and over and over again until you are completely satisfied with the result of your trading,

BUT never give up because the trade didn’t plan out once or twice! Keep on going. It will all come together someday!

 

There are always improvements to be made!

Happy trading Traders!

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