10 Lessons We Can Learn From This Trader Losing Everything
1. Use a stop loss
Protect yourself from blowing out your account in one trade by using a stop loss. If you don’t want to use a hard stop loss (right up against the price) then use a soft stop loss (away from the price but not so far that you lose everything) that gets you out of the market when price makes a big movement on unpredictable global events such as natural disasters.
2. The first trading session after the weekend is subject to unexpected price action
The first opportunity to realize all off the global events that have happened while the market was closed over the weekend is during the first trading session. Make sure you read the news and see what has been happening before you jump into the market on Sunday/Monday.
3. Trading is not a competition
While it’s true that when someone wins, someone else loses, trading is not all about competition. The Forex market is used by many different types of people for a variety of purposes, not everyone is speculating. Focus on yourself, take ownership your own abilities, you are responsible for your outcomes.
[Tweet “Other traders aren’t screwing you over, you screw yourself over.”]
4. Have a trading plan and follow it
Creating a trading plan is the first thing you should focus on when learning to trade. Following it is the second.
5. The market is not against you [Tweet “The market will go where the market will go, it is not reacting to your wants and needs.”]
6. Only risk a small percentage of your account on each trade
This falls into have a trading plan but it’s important to emphasize the need to risk small amounts of capital during each trade.
7. Reverse psychology doesn’t work on the markets[Tweet “Using reverse psychology on the market when in a losing position wont magically make price turn around.”]
8. If you think the market can’t go any higher or lower, it probably will[Tweet “Your worst possible trading scenario can and will happen, then it get worse from there.”]
9. Only trade with what you can afford to lose
Common sense but get this right from the start and you will save yourself the emotional harm that the trader in this video experienced. If you don’t have the capital run a demo account and prove your trading skills to someone who will back you.
10. Explicit language will not change your situation.
What lessons did you learn from this video? Share in the comments section below.