Trading Decisions

A classic dilemma for many beginner traders is determining the optimal time to buy or sell. Should they follow the prevailing trend, or should they trade the range, which often seems more predictable? If you've asked these questions, the following tips can help guide your approach.

Essential Trading Mindset Principles

  • Forget Beating the Market: Do not focus on trying to conquer or outperform the market. Instead, let the market follow its natural course and trade accordingly.
  • Check Your Ego: Professional traders do not allow ego to cloud their judgment. Be humble. When trading forex and other markets, remember it is always better to make money than to be "right."

Using Trends as a Compass

A fundamental principle in trading is that a prevailing trend is more likely to continue than to reverse. Use this insight as your market compass:

  • In an Uptrend: Buy, as prices are more likely to rally higher than reverse.
  • In a Downtrend: Sell, as prices are more likely to keep falling than reverse.

The Importance of Risk Management

Always remember that there are no guarantees in the market. Reversals do happen, and the market will follow its course regardless of your position. Therefore, you must practice good risk management at all times.


Detailed Summary

Beginners often struggle with deciding whether to follow trends or trade ranges. Successful trading relies on a mindset that prioritizes profit over ego and allows the market to dictate price action rather than trying to "beat" it. A core principle is using the prevailing trend as a directional guide—buying in uptrends and selling in downtrends—while always maintaining strict risk management because market guarantees do not exist and reversals can happen at any time.

Key Takeaways

  • Prioritize making money over being "right" (Check Your Ego).
  • Don't try to beat the market; let it follow its natural course.
  • Use the prevailing trend as a compass: it is more likely to continue than reverse.
  • In an Uptrend: Buy (prices likely to go higher).
  • In a Downtrend: Sell (prices likely to go lower).
  • Risk management is essential because reversals are unpredictable and no trade is guaranteed.