In trading, there is a lot that you need to know to be profitable. That includes the terms and technicalities used in forex trading. You need to understand the difference between a trading bias and a prediction. So what are the notable differences between the two?
It is defined as a statement that predicts how things will be in the future. It means that you are looking forward to a certain result. An example of prediction in forex is when you say that a currency pair will trade at a specific time and price.
A bias is referred to as the outlook or inclination. Having a trading bias means that you have confidence in a certain kind of performance that could possibly happen compared to other alternatives.
Being bullish or bearish in trading is considered a bias.
Their Difference and How They Affect Your Results
Noticeably, the main difference between a prediction and a bias in trading is that bias is free for the markets’ confirmation or nullification.
If you want to be a successful trader or Forex Broker in France, you have to develop biases rather than just making too many predictions.
It is usual to have currency biases, particularly when the fundamental and technical aspects verify your outlook. Yet, it is significant to determine if the behavior of the market confirms your biases before you act on trading.
Mike Bellafiore said in his book that you must still have the skills in trading even if you have developed the right biases about the market direction for you to capture the moves. Do not waste your time and energy on predictions when the thing that will really make the difference in your trading journey is your skills and how you develop it.
It will be a bad trading habit if you will not consider the changes in the market behavior while having a blind prediction on how a currency will trade.
If you will keep on trying to prove your prediction right but won’t be supported by the market behavior, you will end up losing a trade after another.
Remember that the market is the boss on trading. It doesn’t care about what you think where the prices go. It will just go anywhere it please to go.
Common errors the trading starters make is being confident that a successful trading is just about making decisions. They even think that their trades or opinions can affect the markets.
A profitable Forex Broker in France that you might tell knows how to process data with open-mindedness and maintain flexibility. You must possess the same quality as you start your journey in the forex. You are more likely to risk missing not only the intraday moves, but also the long-term trends if you only prefer to see the signals that approves your own forecasts.
A well-known trading psychologist advises to trade based on what the market is doing and not what you would want it to happen on your pessimistic fantasies.
Keep in mind that this is a business, and that this business is trading, and not predicting.
In the end, it is your capability to capitalize on price action and adapt to markets that will manifest your predictions, not your trading results.