Thread: What is overconfidence in Forex?

Originally Posted by ;

Overconfidence is when you hold onto a losing trade when it has gone beyond the point/area which invalidates your trade (i.e. where you would have set your stop loss). You're so convinced that it'll turn around which you hang onto trades like that, and continue to construct leverage until your account stinks up.

That is an ideal method of putting it. I really don't know why people do it. Is it arrogance or desperation? Or a mix of both?

Overconfidence is another issue by novice traders! I see many new traders open their 1st live trading account so fast although they don't know enough fundamental and technical analysis of market! However, confident is needed here!

Practically every man jack can come to an understanding that assurance improvements our success rate. When one is convinced, they are further probable to take risks or search for prospects. They can also internalize the conviction that they can complete tasks efficiently. Confidence is an essential feature that we endeavor, including Forex traders. But, things that are profligately can have adverse effects. And there are a variety of traders that are anguished from overconfidence.

Overconfidence bias isn't simply a sentiment as though you are able to knob the whole thing, it is a magnified belief on your skills as a trader. While most Forex plogy lessons often breach contrary to fear, it is imperative that traders understand how and over confidence can avert a trader from getting always profitable.

Overconfidence is definitely a problem for a lot traders. Occasionally it's a product of an overinflated ego, sometimes it stems from jealousy, sometimes the cause is a strange mixture of both. Either way, it's important to analyze one's own actions and acknowledge the mistakes to overcome this problem.

My overconfidence has generated lack of risk management.

After all being pompous will attract trader end up plainly imprudent and regularly, it direct trader settle on incorrect trading decision. I really don't know whether it in term of vacant position or in decide to use border pre arrange. Being careless likewise makes us to end up plainly not aware any longer that the market is erratic and hazard misfortune will dependably exist. Careless has pulverized many ventures during history. Anyway, with respect of Forex trading -- it ought to be seen as a goal wander, not impacted by individual feelings or feelings.

Confident area = maximal result and overconfident destroys trading area.
Therefore this trading habit only likes a curse as such as feelings.

There is a lot different between overconfident and feelings.
Overconfident comes from general confident and
confident comes from trading achievement.
And emotions just an average human nature that maynot prevent despite of getting confident,
but by way of proper trading area it may be controlled with absolutely.

Basically, there's nothing like guarantee in Forex market! So, which traders are trading with an over confidence they may face lots of problem in their trading, that is the dam authentic! Incidentally, I'm confident about my trading however I use stop loss in addition to trailing stop position in accore with my market analysis.

Really being overconfident will bring trader become careless and frequently, it lead trader make wrong trading decision. I really don't know if it in duration of open position or in decide to utilize margin preexisting order. Being overconfident additionally makes us ten to become not conscious anymore the market is unpredictable and risk reduction will always exist.