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What is overconfidence in Forex?

  • #21
  • Apr 26, 2017 7:05am Apr 26, 2017 7:05am
Quoting NeilWagner
Well, there is nothing like certainty in Forex, so if you trade here and expect a 100% trading result, its called over confidence! In addition, trading without stop loss trading position is another popular symptom of over confidence! By the way, I get around 65-70% success ratio in my personal trading system, and I believe in reality! And I dont open multiple trades positions a in a time, since I am not sure about the final result!
I wonder whether there are actually people who think they'd be 100% successful. Maybe some newbies? Getting some experience in trading usually teaches people not to believe in things like that.
  • #22
  • Apr 28, 2017 5:27am Apr 28, 2017 5:27am
well usually newbies have 100% success rate. simply because they dont know what they are doing and they make money.
seen that thousand times
  • #23
  • May 5, 2017 8:10am May 5, 2017 8:10am
Quoting bigjackpot
well usually newbies have 100% success rate. simply because they dont know what they are doing and they make money. seen that thousand times
I think it's more because some newbies learn one good strategy and stick to it closely because they don't know anything else. The more we know about trading, the more we realize how risky it is and that has an effect on our confidence and decision-making process. Newbies don't have that problem yet.
  • #24
  • Jun 22, 2017 2:45pm Jun 22, 2017 2:45pm
Quoting Butterscotch
Overconfidence means, you think you are doing right analysis or trade but at the end, it was not and you face loss. So being confidence and trading is a good way of work but trading like you are master and you can do any analysis is not a good way of work.
Yes, by overconfident without loss at the end you could not find anything. Because this market is too much volatile and there is nobody who can predict the real faction of this market with certainly.
  • #25
  • Edited Jun 23, 2017 12:21am Jun 22, 2017 3:18pm | Edited Jun 23, 2017 12:21am
A trader with a working system does not feel overconfident or lacking confidence because these emotions are not triggered by their trading. If you've been driving 20 years for example, do you sit in the car and feel "overconfident" that you will do a good job driving? No, that's not an emotion you feel when you get behind the wheel right? When you started driving confidence was something you wanted to have, but after a while and when you knew you were a good driver it wasn't an issue anymore. But in trading it could be a double-edge sword where overconfidence is actually a state of "hoping" to compensate for feeling uncertain or insecure about your trading. There's a reason why in trading "overconfidence" is warned against and usually equated with losing. Not trying to get too heady here, just a common reality of trading as I've experienced it myself and as I've heard it from other traders.
  • #26
  • Jun 24, 2017 2:34pm Jun 24, 2017 2:34pm
Hands down, if you objectively trade your method. You wont be having this problem of over confidence. Each trade will be unique, whether it wins or loses.

Manage your emotions to avoid the pitfalls of overconfidence. This is done by studying psychology when you trade.

This guy blogs about this sort of topic , its a great read.

https://www.tradersreality.com/

Happy Trading Guys
If there is no enemy within, the enemy outside can do us no harm...
  • #27
  • Jun 28, 2017 2:20am Jun 28, 2017 2:20am
The main example of overconfidence is avoiding stop loss trading tool! I see, a number of Forex traders are following this wrong route of trading! No doubt, overconfidence is very harmful; since there is nothing like 100% in Forex business so; we should be realistic here!
  • #28
  • Jun 28, 2017 8:11am Jun 28, 2017 8:11am
Statistically, 9 out of 10 traders lose money in Forex. There are many other factors behind it.

I do not think overconfidence is a common problem because most traders get humbled by the market's vicious movement over time. More like lack of confidence would be more prevalent among struggling traders.
'For the market to work, it needs people who think that they can beat it.'
  • #29
  • Jun 28, 2017 8:20am Jun 28, 2017 8:20am
Quoting GeorgeBaile
The main example of overconfidence is avoiding stop loss trading tool! I see, a number of Forex traders are following this wrong route of trading! No doubt, overconfidence is very harmful; since there is nothing like 100% in Forex business so; we should be realistic here!
Some people don't want to be stopped out prematurely out of their trades because of volatility or because of bad entries. It has nothing to do with confidence.

Trading with a tight stop loss is very difficult. While being stopped out at a bigger stop loss too often will make profiting over the long run difficult as well. So they might as well decide not to use any stop loss, and opt for actively managing of the trades instead.

Personally I use a big stop loss that is rarely hit. But the concept is similar.
'For the market to work, it needs people who think that they can beat it.'
  • #30
  • Jun 28, 2017 12:48pm Jun 28, 2017 12:48pm
Quoting AlastorFate
Statistically, 9 out of 10 traders lose money in Forex. There are many other factors behind it. I do not think overconfidence is a common problem because most traders get humbled by the market's vicious movement over time. More like lack of confidence would be more prevalent among struggling traders.
Very good point you have noted. Overconfident is really harmful in Fx trading. But not mostly traders lose by this human nature. Generally there is nobody who can predict the real faction of this market with certainly. So, overconfident is just like a part of immaturity in here. Nothing without it.
  • #31
  • Jun 28, 2017 6:44pm Jun 28, 2017 6:44pm
Overconfidence is when you hold onto a losing trade even after it has gone past the point/area that invalidates your trade (i.e. where you would've put your stop loss). You are so confident that it'll turn around that you hang onto trades like that, and continue to build leverage until your account blows up.
  • #32
  • Jun 29, 2017 6:36am Jun 29, 2017 6:36am
Quoting Ivanyo
Overconfidence is when you hold onto a losing trade even after it has gone past the point/area that invalidates your trade (i.e. where you would've put your stop loss). You are so confident that it'll turn around that you hang onto trades like that, and continue to build leverage until your account blows up.
That is a perfect way of putting it. I don't know why people do it. Is it arrogance or desperation? Or a weird mix of both?
  • #33
  • Sep 23, 2017 8:33am Sep 23, 2017 8:33am
Overconfidence is another common problem by novice traders! I see many new traders open their 1st live trading account so quickly although they don’t know enough fundamental and technical analysis of market! But, confident is needed here!
  • #34
  • Sep 24, 2017 9:47am Sep 24, 2017 9:47am
Practically every man jack can come to an understanding that confidence advances our success rate. When one is confident, they are further probable to take risks or seek for prospects. They can also internalize the conviction that they can complete tasks effectively. Thus, confidence is an essential characteristic that we all endeavor, including Forex traders. However, profligately good things can have adverse outcomes. And there are a number of traders who are anguished from overconfidence.

Overconfidence bias isn't simply a sentiment as if you can knob the whole thing, it's a magnified belief in your skills as a trader. While most Forex psychology lessons often breach against fear, it's imperative that traders comprehend how and why over confidence can avert a trader from becoming consistently profitable.
  • #35
  • Sep 25, 2017 7:47am Sep 25, 2017 7:47am
Overconfidence is definitely a problem for a lot traders. Sometimes it's a product of an overinflated ego, sometimes it stems from insecurity, sometimes the cause is a bizarre mix of both. Either way, it's important to analyze one's own actions and acknowledge one's mistakes to overcome this problem.
  • #36
  • Sep 27, 2017 8:15pm Sep 27, 2017 8:15pm
My overconfidence has created lack of risk management.
  • #37
  • Sep 27, 2017 10:42pm Sep 27, 2017 10:42pm
All things considered being pompous will bring trader wind up plainly imprudent and regularly, it lead trader settle on wrong trading choice. I don't know whether it in term of vacant position or in choose to utilize edge pre arrange. Being careless likewise makes us ten to end up plainly not mindful any longer that the market is erratic and hazard misfortune will dependably exist. careless has pulverized many ventures throughout history. Anyway, with respect of Forex trading – it ought to be seen as a goal wander, not impacted by individual sentiments or feelings.
  • #38
  • Sep 28, 2017 12:37pm Sep 28, 2017 12:37pm
Confident + discipline = maximal result and overconfident destroys trading discipline.
So this trading habit just likes a curse as like emotions.
  • #39
  • Sep 28, 2017 1:05pm Sep 28, 2017 1:05pm
There is far different between overconfident and emotions.
Overconfident comes from general confident and
confident comes from trading success.
And emotions just a common human nature that cannot avoid despite of having confident,
but by means of proper trading discipline it can be controlled with certainly.
  • #40
  • Last Post: Oct 12, 2017 4:45am Oct 12, 2017 4:45am
Basically, there is nothing like guarantee in Forex market! So, which traders are trading with an over confidence they may face lots of problem in their trading, that’s the dam true! By the way, I am confident about my trading but I use stop loss as well as trailing stop position according to my market analysis.
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