The first step towards taming the urge to trade impulsively is drawing a trading strategy. You need a trading strategy that you deem as profitable to be your go-to point when trading. Having a defined strategy means all the trades that a trader is going to choose fall within the trade strategy. This ensures that a person trades objectively and does not walk into speculative trades based-off intuitions. A clear trading strategy will save a trader exposure to risks since he is only trading within a range he can handle comfortably. The chosen formula has to be one a trader clearly understands and is easily applicable.
Discipline in trading is a virtue that a trader has to cultivate. To avoid the temptation that comes with greed, once you have hit your daily goals, it is advisable to close trade trading for the day. If you are having a good run, once you hit your target you need the discipline to walk away from the trade to avoid making a loss in the instance the market turns against you. Suppose you have had a bad day at the market, it is wise to close your trade once daily limits have been met. Trying to salvage a loss by opening more positions leads to a trader increasing the risk of suffering more losses.
To avoid impulsive trades, for every trade position opened, a participant has to have a defined exit point in mind. A profit point has to be drawn as the point at which a certain trade is to be closed. Though it is tempting to follow a price move to its end, it is a risky gamble since the chosen trade might turn against you wiping out all profits that had been made. Sticking to the take profit point limits your exposure to any potential shifts in price movement.
A sure way to limit impulsive trading is to set up a stop loss for any trade that is open. Having a stop loss in mind means that in every position that is opened a participant has a rough figure of just how much he is willing to stake in that particular trade. A stop loss acts as a barrier when a trade goes against you. It cushions your account from making further losses. The idea that despite losses being made, your trade will turn around in your favor is wishful thinking and leads to accounts blowing up since they cannot hold.
In trading, you have to stick to familiar currency pairs to avoid taking on unnecessary risk. This is because with a familiar pair, you can read the market better. When dealing with a familiar currency pair, you are armed with the transaction history of the pair in the past. Knowing how a currency pair performs means you are in a good position to predict how it is going to move next. With unfamiliar currency pairs, all moves being made are purely speculative and have little research backing them up. Such trade practices are wild gambles that might drain your account of valuable capital.
Building knowledge around the fundamentals of trading and factors that affect price movements reduces impulsive trades, replacing them with strategic ones. A person who is better equipped with knowledge on why price behaves in a certain manner is less likely to trade speculatively. Such individuals tend to be more methodological in their approach to trading. Knowing how certain financial announcements, such as changes in policy, will affect the price of a certain currency gives you an edge in trading. Amateurs with little financial knowledge tend to trade based on intuition, a poor way of making profits.
For a beginner in trading, looking for insights from copy trading sights offers valuable pointers on what trades to execute. By learning from experts in trading, a beginner can learn what trades are profitable by observing how professional traders execute trades. This is a better alternative to speculative trading. Through observing the trade history of such traders, an amateur can build on skills required to accurately read the market. Taking the time to listen to industry experts before venturing into the market will save you the trouble of exposing your account to risks that could have been avoided.