Be Open To Changes
When choosing a bias that will determine the direction you want your trade to go, always have an open mind to a possible change in direction. Sticking to your bias is key to having a successful outcome of a trade. You want to be able to trust your analysis, provided you have done the proper research and have interpreted that data into real-time to make a decision as to where you will go.
The Market Is Always Changing
Understanding that the world’s markets are never stagnant and do not have a fixed direction in any period of time, will help take your trading to a consistently profitable level. In trading, you use your biases to find trade opportunities. Having confidence in your biases is also important in risk management. It takes a certain kind of confidence to stick to a plan when the market is not playing out in your favor. That kind of scenarios teaches you how to minimize losses and get readjusted to the market with a possible change in bias.
“Consider and reconsider the facts, and your opinions. Stubbornness as to opinions must be entirely eliminated.”
– Bernard Baruch
Approach And Re-examine Your Biases
Start with a more thorough approach to your research. In-depth research provides for more support to your biases, but it is also important to consider all the information that could go against the bias of your trades for long-run profitability. When planning a trade, an order placed is not the end of your trade. When an order gets triggered, your job is to keep and eye on the trade and other scenarios that could have been missed in the pre-trading preparations. This is especially true in the forex market where the market drivers shift markets very quickly. Therefore, news updates must be read, charts must be double-checked, and communicating with other traders who might have other opinions, will help your trade be on the right side of the market.
One of the most effective ways to practice picking biases and learning from them over time is to use a trading journal. Logging in all of your trades and the processes can provide you with valuable insights. Where you get your research, how to react to catalysts that make your trade idea go south, and how much you profit or loss when you are not flexible with the biases you make.
Having biases is not the be all end all of the forex trades. It is, in fact, a good way to start exploring trade ideas. Just do not expect your opinion to be the only option for the markets. Do not forget when it comes to the markets, you trade what you see and not what you think the markets should be doing.