Have you ever thought about why investors who are always thinking about money cannot make a profit? They should be the ones to make fortune but instead, they are returning home with losses. In forex, not all strategies are going to work. Many professionals have done the math and they have discovered simplicity is the best technique.
When an investor starts thinking about finance, he is going to lose more. The mind is occupied with the advanced thought of profit and in this way, he fails to identify the opportunities. The mind is excited and every trend appears to be an opportunity to change a life. This is why this idea is counterproductive. Apart from this reason, many explanations are going to be discussed in this post.
Thinking about money distracts the mind from analysis
An advanced reason is not focusing properly on the market data. The industry is international which requires the customers to focus on the information. Every moment news is affecting the trends. Professionals spend a long time analyzing the chart. This way they remain profitable when the majority is losing the capital.
If a person is thinking about future profit, there is no doubt he will fail to understand the volatility. This affects the performance and though he was only trying to improve, this makes the investor lose more money. Trend analysis needs to be done with a focused mindset, not when you are distracted by other thoughts.
Forgets to develop Plan B
There is no way to know if a person is going to make money even if the analysis is successful. The trends are changing based on the information. Traders need to devise a plan B for their capital and this requires time. The majority is trying to make a fortune and they forget to have a backup plan.
Even a stop-loss can save the customers if the trend does not go in the expected direction. However, due to their optimistic thinking of capital, failure occurs in the live performance. Many try to recover by using leverage which makes them lose more.
In every situation, traders need to have a plan B. instead of thinking about money, try to have plans if you fail. A person who thinks about money only will have no money at all as he forgets the other parts of planning which make a performance successful. People who start their trading careers with a single plan are not focused. They keep on changing their minds and fails to find the quality trade signals.
Have a look at the smart traders at Saxo capital markets.
Check their actions and you will realize that they believe in plan B. Based on the market condition, they bring necessary change to their actions and find the best trade signals. But developing a plan B is not an easy task. You have to spend a decent amount of time in the demo account and test different kinds of systems. Only then you can expect to create a robust plan B.
Expectation rarely meets
This is the situation of every individual in every profession. They plan to become successful but the track is not simple. There will be many challenges but the person who plans for the future challenges is going to succeed. Similarly in forex, thinking about money only brings more failure. Traders need to start preparing for losses.
For example, professionals try to identify what would lose they can afford before setting up goals for profit. This is developed by their risk to reward ratio. They never think about future success but prepares for the present trends. That is why they remain profitable even when the majority is losing.
As a beginner, an investor has many goals but through progress, he understands the market. The goals are changed but if the thinking remains the same, it is impossible to make a profit in currency trading.