Smart traders know the demand will fall on a sharp rise in price. They
will sell to the new traders as they chase after the stock. The stock
and forex market is saturated with too many new and scared holders of
shares or currency pairs who will sell to realize profits.
They are selling and usually at a lower price to get out of the trade.
Smart investors in the markets see this buying and selling at support and
resistance levels. New traders will enter the trades after they see
the trend getting away from them.
The inexperienced trader will buy after a big up move and panic
sell after a sharp drop in price. Traders need to learn all they can
before investing in any markets. You need to know when to buy and when
to sell. Learning support and resistance areas, learning to read
charts and moving averages is your first step in making money trading.
Remember that any trader should only trade with money that you
can afford to lose. If you are scared to lose then you should not be
trading, so when you have proven to yourself that you can make winning
trades eighty percent of the time then you can increase the amount you
put at risk.
If in your trading you are always trying to get back to break even
then you need to step back and see what you are doing wrong. Has
something else has appeared that you never saw the first time you
started to trade.
Did you let emotions take over and not make the trade, were you distorted
by the greed of making more money or the fear of losing on the trade.
You need to change your thinking and you will be a smart
investor, because if you always do what you've always done you will
fall into that losing pattern again. You need to go back to look at
the trade setup again and see why it was a bad trade. What could you
have done better to analyze when to enter the trade.
This is how smart traders become successful and keep taking money from
the new traders. You haven't put a stop loss in and the price action
makes a sudden and dramatic move and you start chasing a losing trade
hoping to get back to break even. You must change your thinking to
break the pattern and become a smart trader and investor. |
