You’ve checked the charts, done the math, figured out the Fibonacci ratios, checked the news, and reviewed the fundamentals. The only thing you have left is to place the trade already. But there’s something that’s stopping you. The decision not to place a trade is made subconsciously before you even begin to perform the analyses.
You analyze every decision you make and create a great deal of self-doubt. You simply can’t put your brain on pause, no matter how hard you try. Thinking too much about your Forex trades leads to poor judgment, not to mention bad decision-making.
The more you doubt yourself, the more likely you are to start worrying and ruminating. It’s like a vicious downward spiral. If you’ve just started your trading career, it’s mp wonder that you’re dissecting your every thought.
Thinking is a tool and you should use it as such. To be more precise, use it only when necessary.
The negative impact of overthinking on Forex trading
Forex trading requires a strong set of mathematical and analytical skills. If you decide to start trading in the foreign exchange market, you must prove worthy of the profession. Nevertheless, you shouldn’t rely on the analytical mind all the time.
Analyzing everything will only stop you from focusing on the important things in the present. When what you’re doing catches all your attention, it’s impossible to stay focused on the present, not to mention that you can’t go back and forth.
Trading is like a game of chess, so it’s necessary to carefully evaluate each position. Yes, you need to improve the likelihood of succeeding by thinking more, doing additional research, and being at your charts. But that doesn’t mean that you should exaggerate.
If you want to be successful in the currency market, behave calmly and reasonably, especially in difficult situations. Overthinking is dangerous, as it can increase your risk of making mistakes. If you’re an overthinker, you get easily confused. You can’t spot the good trends and you don’t dare to take action.
You’ll find yourself staring at the trade and feel extremely uncomfortable. You’ll lose an opportunity that could bring you money. What you need to do is not to ponder so much about the direction where the price is heading because you can’t precisely predict what will happen. Thinking too much is a bad thing – as is anything done in excess.
Trade the edge and make sure that the trade makes you profits. You may win or lose, but you can’t travel back in time.
3 simple ways to stop yourself from overthinking
When it comes to currency trading, you mostly need a broker to help you get a decent comprehension of what foreign exchange is like and steer you in the right direction. You can choose a brokerage company in or outside the U.S. It’s up to you. As a Forex trader, you don’t need to be the smartest person in the room but just you need a best forex signals.
At a certain career level, it doesn’t matter how smart you are. What matters is the effectiveness in terms of coming up with Forex strategies that work and finding creative solutions to difficult problems.
Now more than ever, Forex traders are influenced by the outcomes of their recent actions. They end up overthinking and analyzing too much. In case you didn’t already know, success is about taking control of your actions in the market.
In what follows, we’ll present some practical solutions to stop yourself from overthinking.
Deal with the fear of trading
You’re too frightened that you’re going to make a mistake and lose it all. Try as you might, you can’t eliminate this emotion. Fear isn’t necessarily a bad thing, as it can help you prevent loss. Maybe so, but if you allow yourself to become driven by your fears, you risk walking away from a well-planned trade.
You have no control whatsoever over the future, so stop worrying so much and take advantage of the present. Be prepared to lose in every trade. Losing a trade doesn’t necessarily mean that you’ll end up blowing your account. You’ll deal with small losses, but good opportunities will come your way. Visualize the things that can go right and maintain a positive attitude.
Stop comparing yourself with other Forex traders
One of the biggest mistakes that you can make is to compare yourself with others. Things always look better from the outside and this is because traders do everything possible to make themselves look better to the world, not disclosing how they’re really doing.
If you don’t cease to compare your trading performance with that of others, it won’t improve. You’re too distracted about what’s happening to manage your account. And you’ll most certainly lose money. It’s better to focus on your strengths and be confident in your ability to handle tough situations.
Learn how to trust your gut
Sometimes, you just have to trust your intuition. This will help you avoid unpleasant situations and will guide you towards what’s truly best for you. Don’t throw your trading plan out the window. It’s not recommended to make impulsive trades either.
The trading intuition is a special kind of intuition that you develop over time. It becomes stronger as you continue to be active in the foreign exchange market. When your subconscious mind gives you the green light to act upon something, you should better do it. Trading with intuition can actually make you a better trader, hard as it may be to believe.
The bottom line is that everyone succumbs to the trap of overthinking every now and then. When you overthink, your brain is counterproductive. Don’t live in the past or the future. The present is more important. If you don’t concentrate on the present, you’ll miss out on important opportunities and register many losses.
Thinking is good, there’s no doubt about that. Just make sure that your mind doesn’t wander off. Resist the tendency to overthink the trading process. It won’t do you any good.