Decision making skills for trader
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  1. #1
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    Decision making skills for trader

    I’ve decided to make article using ideas from my last webinar «Decision making skills for trader». If traders ask what to develop in their trading, I would answer – develop your decision making skills, skills to perceive and process information e.t.c
    We forget that trading is an art, not a science, and like any art, it should be mastered. And too often we forget that trader first and foremost is a decision maker.

    What process of generating effective decision consists of?

    1. Collecting information

    Most of the time we don’t see the market, we see our projections, in other words – we don’t see things (market) as they are, we see things as we are. First, of all, we tend to be very filtering – pieces of information that don’t suit our beliefs and core convictions, are simply undervalued (if not rejected at all). Second, we tend to be superficial in our observations. Ability to observe is what we really lack.

    What is the cure? How can we be less filtering?

    We should train ourselves to think «outside the box» - to generate creative ideas instead of simply repeating old «mantras». You may oppose me saying that «there’s not too much space for creativity in trading». Yes, most of the time trading is about acting upon your plan and it can be boring enough. We should be rigid with our risk management. But in a process of trade selection, in a process of generating trading hypothesis, we can be flexible, we observe, we perceive and we generate idea… well, trading idea, of course.


    2. Recognizing patterns

    That’s really what most traders fail to do. I mean what I’m saying – it’s not difficult to draw a trend line, to spot a triangle or double top/bottom, but what is really difficult is to put everything in a context and understand – what is really going on. And it’s not actually about understanding – it’s about seeing. Some traders see good patterns, some don’t. Why?

    Most traders try to recognize patterns doing analytical work – they divide complex picture (chart) on several small parts (candlesticks) and apply formal logic trying to capture relationships between those parts. How do you think – why candlestick analysis has become so popular? Because it suits tendency of human mind to divide and split information, when we see something complex, we tend to immediately split it into pieces and try to figure out – how do those pieces relate to each other? Maybe, it’s a 1.618 principle? Or maybe we can connect dots with lines? Or, maybe, we can build fancy figures with those dots?

    Remember the impressionism art. Nothing was really visible until viewer has made several steps away. Hidden picture now was visible. The same is in pattern recognition – wherever you try to find it – it trading, in deciphering anything or solving a task. Until you are ready to change your view, to concentrate on big picture rather than on nuances, you will not be able to really see a good pattern.

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    Both of these are important for making successful trade. Collecting information gives idea where market may go and why. So a trader knows what he is doing. And besides analysing historical charts are important. It gives idea about trend's possible rest and reversal point. For better understanding these experience is required and with the passage of time a trader will be able to analyse more perfectly and make good amount of pips.

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    I have like the way you have explain the patterns to try and think separate from the hurdle and also in recognizing a pattern one should use practice and things other than orthodox , but what about practice . Can practice helps us in defining and trade those patterns and look to concentrate on what is hidden under the charts . I have gone through all the posts and threads of your where you emphasis on supply and demand behaviour on momentum days and does these rules you are trying to point out here as well .

    My sincerest regards

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    Well, the trading pattern of the trader is the main thing on purpose here, if the trader get nice trdaing approach, it will lessen the stress of the trader in this business. What i mean is that, traders should collect nice ad useful information, but that does not mean that he should trade on that day, he should trade only when the signal maturity comes.

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    I am facing huge problem in taking right decision in right time. After reading this thread I came to know about many good aspects of proper decision making which will increase my trading skill. Actually, appropriate decision in appropriate time can lead us a profitable trading. I appreciate this lesson and try to maintain it in my trade always.

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    For someone like me, deciding the progress of trading in the forex market require ability to read thethemarmet ahead of time and reach a logical conclusion. Some times a trader may not be able to execute trades on the forex until he has received several trading signals. For me i need only to study the market ahead and form a trading idea, determine the adverse side and confirm my decision.

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    Yes I think decision making on Forex market is a very hard thing but we need to take decision when we prepare ourselves to make a new order. To get nearest idea about markets movement is a very challenging part but we must try to know about that and need to take decision by depending on these idea. May this skills can help you to make a good profit.

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    I think decision making skill is very important in forex market. if we have good skill to make decision than we can get more benefit from forex market. some time it happen market is move and we need quick decision to enter in this market.if we make right decision at right time than we can get more benefit from this market and we earn good money.

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    In Forex trade , a trader must be a quick decision maker so that they can able to take any good decision fast , looser type of trader can not take fast decision , due to the fast movement of market sometimes we must take some quick and right decision for perfect trade .That is why trader must be talented and sharp minded .Making good decision in Forex trade is not a simple matter , quick decision is also a type of skill of a trader .

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    some of traders was trapped by some situation, and because they wanted to get the best moment for trading and make good profit, but at last bad situation was ours, i believe that some of us have already known how to analyze the market, use the trend line, indicate support resistance and etc, but at last, fail to implement them during in the market, and for these situations, , all is back to us, why did we break the rules ?

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