It is very hard to convince someone that you are right and he is wrong. Most of the time, the person you are arguing with remain in his conclusion that he was right the whole time. This article will not tell you how you can win an argument with the other traders but will tell you something very different. Have you noticed that the same chart is explained differently by the same traders? If you give some people a chart with the same trend, at the same time and even with the same patterns and indicators, they will still somehow manage to make their own explanations. This explanation will not match with each other and if you listen to their arguments, you will be convinced that each of them is right. That is not possible as the same chart cannot have two different outcomes but still, it has got two different ideas. This article will try to explain you this puzzling topic in an easy way so you can understand why the same chart is recognized differently by different traders.
It is not the chart that is different, it is their mentality and background
The first thing about this chart is it is all the same. You have given them the same chart with the same trends and patterns. They are all the same but the traders’ mentality is not. They come from different background and they have different views. If we give you one easy explanation, you will understand why the background is important when determining what is right and what is wrong. A person from a wealthy family will consider frying a chicken to make his dinner. A person from a middle-class background will think of making chicken stew with the meat because he knows it can feed him and also his family members. Though both of them are right, it will make their belly happy, but the difference in their backgrounds make their ideas so different. This background develops with trading experience and wisdom that is not the same for all traders.
If you do not have the same mentality as the other person, you can hardly make any friendship with him. If you set two people on two different sides of six, one will see the number six when one will see it nine. They are all right based on their position. This position is their background and the number six is the chart. For one trader it is six and for one trader it is nine based on their positions of where they see them. In order to make a consistent profit, you must know the details of Forex trading Australia. Knowledge is the most essential thing that you need to know as a trader. Keep learning new things to become a profitable trader.
It can happen that people are becoming emotional when they are losing their only investment in this currency market. If you do not get emotional with your trades, you will analyze the chart based on news and information, past trends and with your understanding. If a novice trader analyses the same chart but is emotional, he will use his emotion and make some decisions that are not good. He may want to set a big position size in this trade because he feels overconfident as he has just won a trade. He may also want to use leverage. Emotions can make the same chart seen differently.
Follower and believer
Many people are happy to follow the other people in this industry and they never make a profit. There are also traders who believe in themselves and they make their own analyses. A trader who only follows the people will have the analyses based on the people’s decisions but confident trader will have his own explanations of the chart.