Psychological fallacies in daytrading

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Daytrading is a term for making deals whose lifespan doesn’t exceed one trading day. This type of trading looks especially attractive for newbie Forex traders. It gives an illusion of quick return and good results. But at the same time daytrading is very demanding. One needs to make decisions quickly. And this causes the newbies to get hot-tempered, to make mistakes and to make too many deals. In a rush, they can make decisions that will cause financial losses. To avoid such problems it could be useful to read following rules that help to avoid psychological fallacies of the daytraiding:

  • work with timeframes of one hour and more;
  • don’t mistake the wish for the reality while waiting for a signal;
  • work with maximum two or three currency pairs to clearly see the outcomes of your decisions;
  • don’t risk a significant part of your deposit and don’t get too emotional in any case.
Follow above-mentioned recommendations and you will create a base for profitable trading. You can read more about daytrading and other trading methods and strategies at liteforex.com.