Guest Commentary: If in Doubt, Stay Out
Are you afraid of missing out on good trades? Sometimes you can miss out a good trade. That happens. But this fear shouldn’t push you to take a trade you’ll regret later on.
Fear can be a part of any move you make in your life. When it comes to investing your money (real money, not a demo account), this fear is certainly understandable. Being afraid of losing a trade is part of the game.
It’s the same fear in disguise the other way around: being afraid of missing out on a good trade is the exact same thing.
There are clear cut cases where a trade looks good and you feel very confident with it. Also the opposite clear cut setups that look bad certainly appear.
Yet as in real life, there is a wide gray area, and different shades of this gray.
In order to focus on what shade of gray this is, take a short break, and then look again, Does the trade match your plan in all critical aspects? If not, there’s no doubt anymore. This is a trade that shouldn’t be taken. The break helped us reach a clear cut decision. Great!
The more difficult case is one where you mark all the Vs on your checklist, yet you’re still in doubt. Why are you still in doubt?
Another move away from screen can help clear your thoughts. Upon returning from this break, are your doubts still there? If they’re gone, you have a trade – your mind is freed out of unnecessary doubts, the trade looks good by all means, and you’re ready to roll.
But what if the doubts are still there? If you can easily tell what’s wrong, then you can easily walk away. You have finally found the missing piece that disqualifies the trade.
If after all this, you can’t place your finger on the missing piece and you are still in doubt, then stay out!
You’ll feel better by not doing something you’re not certain of. Sure, you may still see that your missed trade succeeded and still discuss it with yourself over and over again, but your suffering would be greater if it would be the other way around.
What do you think?
Further reading: 5 Most Predictable Currency Pairs
By Yohay Elam, Forex Crunch
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