The accumulation of losses and mistakes of course then leads to a loss of confidence.

Once fear sets in, it’s easy to lose objectivity and make even more mistakes. When you trade beyond what you’re capable of you will not only suffer outsized losses but your judgement becomes impaired. One of the big mistakes traders often times make, is they tend to trade with too much risk. Knowing the behavior of a small universe of symbols will give you more confidence. Not all asset classes or even instruments within the same asset class move the same, they have their own personalities. Know the markets that you are trading and keeping your universe small is always a good idea. Get My Guide Which markets will you focus on? This will help steer clear of indecision, another clear enemy to confidence. You need to be consistent with your trade objectives – don't turn day-trades into swing-trades and swing-trades into day-trades, know your intentions ahead of time and stick to it. This is also why day-trading holds such an allure, but you need to understand if it is for you or not first before diving in. This is where day-trading can become quite difficult, as it is mentally taxing due to the pace at which markets can fluctuate in such a short time. They provide ample information and opportunity, while slow enough that you aren’t forced to make decisions on the fly. For example, the daily and 4-hr time-frame are excellent time-frames to concentrate on when trading FX. What time-frame are you most comfortable with? In addition to understanding your toolbox, whether it be technical, fundamental, or a combination of the two, you should have specific trade set-ups outlined that provide you with an edge, or statistical advantage over time. The key point here is that you have a methodology, and a relatively simple one, as too much complexity causes paralysis by analysis, an obvious enemy of confidence. There are countless ways to analyze markets with no truly right or wrong approach.

Get My Guide Know your methodology and toolbox

Marty schwartz trading strategy