Why Overthinking Is Dangerous In Cfd Market

Discussion in 'General Trading Discussion' started by Adam Smith, Feb 9, 2018.

  1. Adam Smith

    Adam Smith Member

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    The financial world is full of risks so you should be cautious when dealing with the market. It is not possible to become successful traders if you are over thinking about what you should do. The major destruction is due to thinking too much about the decision you should make. The traders in the United Kingdom are not the ones who overthink so they have not being caught in the danger. They know what they are doing and they are aware of the overall market. If you overthink when making a decision in the trading become it becomes scarier and huge so it turns out to be worse. Even a profitable trade signal may look as if negative if the trader keeps thinking about the market. The way you trade the market will change if you think too much about the market. A trader should not spend too much time in decision making because it ruins the whole positive environment. When a person overthinks the results become negative even if it should be positive. In this article, we will share why overthinking is dangerous.

    Making a consistent profit on the investment is very challenging. If you look at the professional traders at Saxo you will understand how well they take a managed risk in this market. On the contrary, the novice traders are always placing trades with big risk and losing a significant portion of their trading capital. The moment they step into the investment world is the very moment they start losing money. Without having a proper knowledge of the financial industry you should never trade this market with real money. If possible take some professional trading course as it will give you a clear guideline to become a profitable trader. You must have a financial backup for at least six month or else things will become stressful for you. If you lose trade, never get upset. Wait for the next possible trade setup and trade this market with low-risk exposure.

    You are missing the wider perspective
    It is pretty easy to become an overthinking person but it is really hard to come out of it. If you are an over thinker you will not see the wider picture. You would not have a wider perspective regarding the market. In CFD trading, the decisions should be made with clarity but you need not think too much. If you think too much the decisions will turn out to be in the wrong way. If you look at the market you can analyze it easily but if you spend too much time in something it becomes a mess. If you are spending too much time in thinking it is the matter of energy and time wastage.

    Cannot make proper decision
    You should have a limited time to take a decision when trading because if you spend too much time on one decision it becomes complicated. And traders spend time in looking at the market for nothing which is not a good factor. What would you get by just staring the market without taking any step? Of course, you should take time and make decisions but it should not take too much time. You should take the time to analyze the market and based on the analysis take the decision. Even when you find a profitable trade you should not let it miss by thinking too much whether to enter or not. When you spend the time in thinking it becomes difficult to come to a proper decision.

    Involve stressful situations
    Of course, if you think too much, you become stressed. Thinking too much of anything is good for nothing so even in life do not spend too much time in deciding anything. CFD market is a great market to profit from but by thinking too much the traders make it complicated. There is no room for stressful situations but overthinking eventually creates such a situation.
     
  2. longtermbull

    longtermbull Administrator Staff Member

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    There is an argument that when you are under stress you tend to go with your gut feeling and NOT over think things. In my opinion there is a balance here - stressed enough to be focused but not too stressed that you make a sudden rash decision.
     

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