In the Film “Dirty Harry” starring Clint Eastwood, the character Dirty Harry has a villain in the sights of his famous magnum hand gun.
A few inches away from the villains hand is the villains gun.
It’s a tense moment in the film while the villain decides whether to go for his gun on the assumption that Dirty Harry’s gun is empty – or to surrender.
Dirty Harry then utters the immortal line “Are you feeling lucky punk, well are you?”
Of course, Dirty Harry knows that he [Dirty Harry] has an extremely high probability of a successful outcome to this encounter.
A common thread amongst many novice (and some not so novice) traders is that have been placing trade after trade and at the end of the day/week/month they are not doing as well as they expected.
Does this ring a bell?
One of the greatest myths in trading is that an “active” trader is one who spends their entire trading day placing trade after trade.
Some even believe that the “active” trader places trades on several different currency pairs simultaneously and as soon as one trade closes they open another.
Many novice traders spend their whole time looking for trading opportunities and become very dismayed if they cannot find one – believing that the market should somehow provide the ideal opportunity for them whenever they desire to trade.
These are the very myths and miscomprehensions that cause many novice traders to produce poorer results than they would have wished for.
In truth, the active and successful traders are the ones who spend their trading time studying the charts, assessing the possible impact of pending news releases and watching for all of their indicators to move into perfect harmony.
Then they start looking for reasons NOT to trade.
Yes, I’ll say that again – They start looking for reasons NOT to place a trade!
If after looking for reasons NOT to place the trade, they cannot find any, then they know that this will be a high probability of success trade.
Then, and only then, they enter that trade. Successful active traders understand that opportunities need to be watched and waited for.
They understand that great opportunities regularly come along, they just need to be ready to take advantage of them when the time is right.
Successful traders know that they cannot force the pace – the market dictates and they respond, but they only respond when the conditions are as near perfect as can be expected in the forex market.
Does this take a lot of self discipline and self control? Yes.
Does it make a lot of difference to their overall trading performance? You bet it does.
Next time you believe that you are ready to place a trade, try looking for reasons NOT to place that trade. You will be amazed at the difference that this procedure will make to your trading.
In future, before you pull the trigger, you need to have the assurance of knowing that you have the highest probability of success – just like Dirty Harry had – and to not be asking yourself “am I feeling lucky punk, well am I!!!”
Source by Martin Bottomley