When it comes to your Forex trading, who actually makes all the decisions regarding your trading account? Be honest, is it you or some other random person? In other words, you could be like so many other traders that allow television reporters, friends, spouses, or even your greed or fear place most of your trades.
When you do not take control of your trading decisions, you are loading far too many other variables influence your results. For many traders, it is basing trades off of things they hear on the television, or possibly even something someone said to you. If you find that you are shorting a currency pair based upon some random technical pattern you’ve never heard of, but have entered this trade because some “expert” thinks it’s a short, then you certainly are not in control of what’s going on.
By making all of the trading decisions in your account for yourself, it makes you responsible. If you are responsible for all of your decisions, in theory you should make better decisions in the long run. This doesn’t mean that you won’t make stupid trades. It means on the whole, you will be a better trader, or at least a more consistent trader.
Too many people allow the noise of the markets, the commentators, and the analysts to make trading decisions for them. This is the easy way out, because it gives the trader an excuse when things go wrong. It’s easy to say “See I told you, I wanted to short this pair but that guy on TV said it was a long!” This allows the trader to feel better about making the “wrong” decision. It is simply a mechanism to protect the ego so that the trader can pass the blame on down the road.
Of course, the biggest issue with this is that even if it was the fault of the guy on television, it’s not his account that’s suffering. He doesn’t take losses, so it’s much easier for him to give advice. It’s much more difficult to make the decision when you actually have something riding on it. Because of this, if you are responsible for your trades – in theory your trade should be more well-thought-out.