There comes a time in every trader’s life when they suddenly start fancying a trade. This is like emotional involvement that is so strong that it is unexplainable. Like love. They want to coax the trade, talk to it and have no barriers spoiling the relationship. So stops are removed to give the relationship room to blossom and bloom. The trader gets so taken in by the trade that there is a belief that the trade will never let the trader down. After all there is this deep relationship that has developed.
A trade entered into on the five minute chart will suddenly become justifiable on the daily chart. The trader tries everything to win the heart of the new love. Like a boy experiencing his first relationship the trader can think of nothing else but the new found relationship. The trader’s behavior becomes clumsy and irrational and he is high on hope and optimism that the relationship will be a good one. His friends warn him against the dangers of this newly found infatuation but he defends his new love with some irrational comment.
But the maiden he is courting is a sly one. She encourages him with moves in his direction and then slowly moves away. Every move in his direction is a promise of what may be. Every move away makes the trader wonder what has gone wrong with the relationship.
Stop! Wake up!! She may never come back to you. You will be lulled into this type of relationship when you are at your weakest or when you are whimsical and not focused. It can happen at any time. Many traders have lost most of their accounts because of events like the one described above.
It starts out small, like when you are in a deal and suddenly you see a deal that is a sure thing for ten pips so you enter it to pass the time. Sure enough it soon reaches plus eight and as you are trying to place a stop at break even it suddenly retraces and becomes negative. You start thinking that this is just a temporary setback and it will recover. It goes to plus five soon, but then retraces. The trader soon becomes emotionally involved in this sure thing deal and he watches every tick. An hour later at minus sixty seven pips the trader is still wishing the deal will come back to his target.
The moral of the story is: Don’t fool around. Don’t tempt the Forex Market. Be faithful to your Forex strategy and Forex business and wear protection in the form of a stop. Stay focused and treat every deal as an important investment. Learn to take negative deals as the cost of being in the Forex Market and see what you can learn from them. Stick to your system for better or worse. If you find yourself wishing and hoping it is likely that you are treating your forex trading as a gamble. If you are trading probabilities and know that four out of ten deals fail and you do most of your work before the deal is placed and not much afterwards, you are closer to being a professional Forex trader.
Hopefully this has brought a smile to those traders who have fallen in love with a deal before and lost money. Most have. To those new to Forex trading please treat falling in love with a deal and not using stops, as a cardinal Forex trading sin.