By: Terry Allen
After a time, many Forex novices opt for the apparently easier choice of Forex day trading once they have struggled with the difficulties associated with longer time-periods. One of the main reasons they make this change is because they think that they can gain profits at a quicker rate by using the Forex daily charts. However, should you try to do the same then you will soon discover that the data used in day trading is significantly less reliable than that associated with longer periods. Basically, the statistics are of inferior quality.
In addition, Forex can generate such levels of volatility that it can render many features of daily charts almost useless such as support and resistance levels, etc. You must not let your greed lure you into thinking this type of trading is an easier option because of the prospects of quicker profits. Instead, you must accept that the necessary levels of Forex discipline required for successful Forex trading is difficult to maintain whatever method you select.
For instance, if you attempt to use high Forex leverage in order to secure larger profits, then you will leave your Forex trading account vulnerable, particularly during times of high FX volatility. For example, assume that your strategy possesses a poor win:loss ratio but high reward:risk one. Consequently, you will need to achieve a few big wins whilst suffering many smaller losses. However, to perform such a task successfully will require that you develop significant levels of discipline, patience and confidence. The sight of so many consecutive losses can produce strong negative emotions in you that can devastate your Forex trading resolution.
If you experience a string of failures, then the resultant sense of despair can easily make you deviate from following the strict rules of your Forex trading strategy. Do not despair and feel alone because most traders experience significant drops in confidence after encountering bouts of consecutive losses. Your natural instinct will be to avoid further pain which will make your faith and confidence in your Forex trading strategy wane significantly.
So what can you do to combat all this negativity? You need to take steps to enforce your trust in your strategy. You can do this by continually reassessing its capability by calculating its win:loss ratio and expectancy value. Always ensure that you adopt sound money management concepts in order to provide maximum protection for your account. This action will give you room to breathe and a chance to recover from losses. Also, you need to advance your Forex education at all opportunities. If you can locate other sources or websites of sound Forex advice, then you will find that you have made a very positive and significant step forward.