Being a perfectionist can seriously hinder your progress as a forex trader. That’s because trading forex requires a certain flexibility and instinct. Expecting perfection can lead to serious trading errors.
The first major error that the currency trading perfectionist makes is waiting for the dream set up to appear. Trouble is, it never comes.
The fact is that the forex market is a rough and ready place. If you wait for that perfect setup you’ll be sitting there forever. You need to learn to enter the market when things line up just enough to give you an edge.
Another error perfectionists make when trading forex is to freak out when their position moves into a loss. You need to understand that the forex market is a volatile place with a lot of noise.
Very often, your well-placed trade will plunge into the red before retracing and ramping up the profits. Perfectionists find this hard to bear and often close their positions in fear of greater losses.
Armed with a good stop loss you never have to fear massive losses in the currency market. And you need to accept that losses are inevitable. The only way to avoid losing is to never enter the market in the first place.
Finally, there’s the matter of exits. The perfectionist dreams of squeezing the last drop out profit out of every trade. That means as his profits rise, he stays in the trade longer than is wise.
And if the trade turns against him and his gains start to dwindle, he can’t bear to get out with less than he had a moment earlier.
If you can recognize perfectionism in your own trading, your need to realize that ultimately the only way to beat it is to have a rock solid trading plan and to stick to it. For this you need a proven system that’s easy to follow and gives clear guidelines as to when to enter, hold and close out.