The quality of many aspects of a human’s life matters more than quantity. Sometimes when doing a task, an employee may produce a lot of products and another fewer for the same job but more polished products from the one who produced fewer products.
It takes time and resilience to come up with something that has quality. It would cost more money or investments to come up with a quality product than come up with products of large quantities.
3 Reasons Why the Quality of Your Trades Matters Far More Than the Quantity
The aspect of quality and quantity also applies in forex trading. This article will highlight three reasons why the quality of a forex trader’s trades matters far more than quantity.
Too many trades dilute your edge
It would be obvious to think that the many trades a forex trader places gives him more chances of getting a profit. When a forex trader starts trading forex, they should take their time and understand what forex trading is all about. Forex trading is not all about placing trades haphazardly but doing it systematically.
Too much trading forex may yet again complicate the whole of the trading process and lead a forex trader to losses he or she would have avoided. Overtrading forex is referred to as a forex trader always finding themselves trading. This is glued more to the addiction of trading forex and is a behavior that should be avoided.
A forex trader should not get to a place where they cannot lead their normal lives, start to lack sleep, and spend their whole-time watching life trades and forex market prices. Such behavior of a forex trader is one reason why the quality of a forex trader’s trades should be focused more on the number of trades a forex trader places.
The spread and commissions eat into your profits
The majority of the forex traders that want to make profits will bring in forex brokers to place trades on their behalf. Good forex brokers to work with are registered and licensed and hence will win the forex brokers by assuring them that they can trust them with their trades and handling their trading accounts.
Forex brokers are experienced in the forex trading business and hence will usually lead the forex traders in the right direction. In most cases, there will be a majority of profits coming in despite slight losses here and there and that should be expected as forex trading can either bring in both wins and losses.
Forex traders get these forex brokers through the forex trading platforms they work with or even through a referral from a fellow forex trader who benefited from using the services of forex brokers. These brokers hence have salaries from the forex trading platforms they work under but also majorly earn from the commissions they get after making a forex trader get a profit. These spreads and commissions that a forex trader has to give a forex trader eat into the profits a forex trader gets.
If at all a forex trader took time and learned the art of forex trading, they would easily place trades on their own and have no one to answer to when a profit comes through. It is for this reason that forex traders should understand that the quality of the trades they place is far much more than the number of trades.
Doing too much of anything is usually a bad idea
As earlier mentioned, doing too much trading might lead to greater losses. This should be at the top of the mind of a forex trader that they should know how much of trading forex they do. It is a life-based principle where the saying goes as too much of anything is poisonous.
This is why plans and strategies of forex trading should be put in place when one starts trading forex. Plans and strategies will assist a forex trader to do just what they can do and handle.
This article discussed three reasons why the quality of your trades matters far more than the quantity. The three reasons are that too many trades dilute your edge, the spread and commissions eat into your profits, and doing too much of anything is usually a bad idea.