First, a few lines as a follow up on the EURGBP trade which we discussed in the last article. We managed to make about 40 pips on that trade before the break out from 0.8910 turned out to be a false break. Britain is still very far fromQE and so, we EURGBP has moved down a lot taking EU with it. We can now expect consolidation at the current levels. This trade is a very good lesson is being as nimble as possible considering the situation. We noticed weakness and hence got out at 40 pips rather than waiting for the target of 0.9000 to be reached.
Now coming on to the short cut for success. Lets assume we start out trading for the first time. Like most others, we enter trades without rhyme or reason, get lucky and we get a few successful trades. We think trading is easy, over trade and then the tide turns. We hit losses, we blow up accounts. We go back to the study room,refer books, forums etc. which tell us to move to the next stage which is to draw up a trading plan.
We draw up a trading plan, take a couple of trades based on that which come out good. Lets assume that the trading plan is based on the 4H charts. Once we get a couple of good trades, we become impatient and start losing discipline.
We start thinking. We just cannot sit idle and wait for the next setup. We want to be part of the market. We want to be in the market always. We want to be in the game. Only problem is that, trading is not a game. Most people come into this market thinking it is a game and they want excitement,tension and entertainment. They simply cant sit without that. But remember, ‘GOOD TRADING IS BORING’.
Good trading involves waiting for the right moment,right setup. It involves waiting several hours, waiting and watching several hundreds of pips go past you so that you can get one trade. It is excruciating and you feel let out. But thats what you need to do.But what do we actually do ? We try finding short cuts to our trading plan.
If our plan involves X line crossing Y line, we cant wait for the next 4 hr candle to see the cross. We try to jump the gun. We say ‘X is ABOUT to cross Y. So lets jump in’. What happens? In the next candle. it doesnt cross, our trading plan fails, hence our trade fails and we lose money.
Moral ? There is no short cut to success. There is no short cut to good trading. There is no easy money. Trading is simple but not easy. It involves waiting, waiting and waiting. It involves mental strength and discipline. So, remember, there is no short cut to success. In my next article, i will explain how much of work i had to put in to reach this level of competence. And believe me, i am still not half as good as the great traders out there !!
I do run a signal service with has a very highly unique offer which creates a win-win situation for all. If you are interested, please contact me through twitter or email ([email protected]).
Do follow me on twitter (http://twitter.com/ns_karthik) where i post some of my trades in real time.
Winner’s Edge Trading, as seen on: