Newbie's Corner - Confidence about trading
Once a newbie trader becomes an experienced newbie trader with knowledge, why he is still struggling in trading? With good trading strategies, good trade setups, and technical knowledge about indicators, he will be trading with confidence. But why he is not having confidence?
I will explain two important factors here. First one is the expectation of holy grail strategy or trade setup. This type of expectation comes when a person is not ready to understand that 100% success trades are not possible. People who have this type of expectation will follow one strategy for some time, then switch to another one when they get few losing trades. They spend their money, time and energy in finding new strategies & testing it for some time before finding some other new strategy.
Next factor is not having sufficient understanding about the strategy or trade setup. It makes a trader to lose interest on his strategy once he encounters few losing trades.
The solution to trade confidently lies in back testing. Usually professional traders back test their strategy at least for the past 4 yrs. This makes them to understand how their strategy works in different market situation and to know the trading edge. Have you back tested your strategy? If not now is the time for back testing...
I will explain two important factors here. First one is the expectation of holy grail strategy or trade setup. This type of expectation comes when a person is not ready to understand that 100% success trades are not possible. People who have this type of expectation will follow one strategy for some time, then switch to another one when they get few losing trades. They spend their money, time and energy in finding new strategies & testing it for some time before finding some other new strategy.
Next factor is not having sufficient understanding about the strategy or trade setup. It makes a trader to lose interest on his strategy once he encounters few losing trades.
The solution to trade confidently lies in back testing. Usually professional traders back test their strategy at least for the past 4 yrs. This makes them to understand how their strategy works in different market situation and to know the trading edge. Have you back tested your strategy? If not now is the time for back testing...
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