Don’t Trade Forex Like A Pig

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Don't Trade Forex Like A Pig
Don't Trade Forex Like A Pig

Tiếng Việt Português فارسی

Entering the field of finance, you’ve probably heard of concepts such as “bull”, “bear”. The bull represents a bullish market, the bear represents a bearish market. Have you heard of the concept of “trade like a pig” yet?

If you’re not aware whether you’re in the market of bulls or bears, sorry to say, you’re a real pig. And most likely, you are losing money. Pigs have two characteristics that are omnivorous and greedy. These are equivalent to greed and continuous (less selective) trading.

There is an expression on Wall Street as follows: “Bulls make money, bears make money, and pigs get slaughtered”. This quote is a warning to traders or investors against greed. Please wait patiently for good opportunities to come. These two things can also be seen as one. Because if you are not greedy, it will be very easy to wait for a good price pattern to place an order. Curbing greed is a really difficult and very difficult thing.

In this article, we will discuss how Mr. Market punishes greed. Or how do we have the phrase “trade like a pig”? And how do we control and escape that situation? If you want to earn green dollars from the market rather than getting slaughtered by it, read this article.

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Do you trade like a bull, a bear, or a pig?

Traders need to understand which market they are trading in (up or down). They need to stick to market trends and don’t trade too much (not too greedy). By doing so, they will (usually) make money in the long run.

I know a lot of traders trying to prove that they are correct and go against the trend. And as you know, we cannot control or drive the market to our liking. This is a dangerous trap if you do not know what a bullish or bearish market is.

And although many traders know what market trends they are trading in, they still “fight” the market many times by trading too much. Or we could take a funny image of an omnivorous pig.

Are you a bull, a bear, or a pig?
Are you a bull, a bear, or a pig?

So what you need to aim for is to be a bull or a bear in every market, not a pig. Bulls or bears depend on the trend of the market you want to trade. The bullish market is tied to the image of a bull (do you often drink Redbull? It rams upward). The bearish market is tied to the image of the bear (bears always scratch their claws down on the ground).

For example, in a bullish market, you just need to look for signals (candles) that give us an opportunity to buy. And you should only place a buy order. Never go against the market with sell orders. If you do not see any positive signal, keep on waiting. Remember that not trading is always better than losing money.

Excessive expectations

“Pigs” are always too expectant in trading. They think they have found a goldmine and would soon join the millionaire club. You can be confused with advertising banners, promises of easy-getting rich from bad websites, or online mentors. However, I can assure you of one thing that it is impossible.

Actually, if you (still) think that you can get rich really fast with this forex market, I will give you the best advice. Please withdraw money from your account. Shut it down and never read any information about forex trading again. You will certainly be better, and richer. Trying to get rich fast with Forex means that you will be poorer soon.

Excessive expectations
Excessive expectations

The faster you want to get rich, the bigger your expectations will be. At that time, you will enter more orders because you “see an opportunity” at every step of the market. And just like a gluttonous pig, you will trade and get “slaughtered” by the market. Your account will evaporate very quickly, for sure.

Do not pursue what happened

If you miss a good chance, don’t “go after” it. Quickly accept that you have missed that train, and wait for the next “opportunity train”. When writing these lines, I just missed two “trains” in a week with the EUR/USD pair. Everything seemed to be fine, but I felt something wrong so I missed the train, twice.

If you enter an order when things have been “already”, your entry point is not really good and your stop-loss will be wider. And most likely the market will move in the opposite direction of your order in a short time. The pursuit of orders is almost synonymous with greed. You cannot succeed if you try to go after every movement of the market. It is also unrealistic to get profits with any market movement.

Accept what you have missed and wait for the next opportunity
Accept what you have missed and wait for the next opportunity

All you need to do is to “catch” 2 or 3 good market movements within a month. It’s all that you need to get a relative profit. 

What is the meaning here? Trading forex is not for everyone. If you are still struggling with daily life, do not participate. You will definitely lose money during your first time (tuition fee for the market). And it is lucky if you lose money, not make a lot of money by certain luck.

So what does “trade like a pig” mean?

It is pretty simple. If you risk losing (stop-loss) more than the amount you feel free to lose in an order, you are trading like pigs. What you are about to face is a big loss and (almost) blow up your account, maybe in a few hours or even a few minutes.

You cannot become a true trader (let alone becoming successful) if there is no discipline in everything of the transaction. You need to have your fixed stop-loss threshold. That threshold is determined by the amount, not the percentage compared to your balance.

After placing an order (entry point, stop-loss, take-profit), turning off the computer, and going to bed, you may be still sleepless. If it is because of the money which could be lost if the market hits the stop-loss, you need to adjust the amount of the stop-loss.

Traders, who know how to manage risk, will make money in the short term and especially in the long term.

Traders, who know how to manage risk, will make money in the Forex market
Traders, who know how to manage risk, will make money in the Forex market

Conclusion

As you can see, greed is the leading assassin that kills numerous accounts, both large and small, very quickly. Warren Buffet used to have a saying like this which you probably heard a lot. “The most important factor determining the success of an investor is not his intelligence or skill, but his temperament and emotions.”

Don’t be a pig waiting to be slaughtered. Find out if you should “be” a bull or a bear to bring money home.

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