Everyone who comes to the Forex market wants to earn money. Some people know the steps to become profitable, others hope that they are lucky enough to get their first million in just a couple of months.
Anyway, even newbies who want to earn step-by-step can make a mistake that would negatively effect their accounts. What are those mistakes? What are the rocks on your road to success?
The team of JustForex broker is here to tell you about them. They say, “Measure twice, cut once”, don’t forget about this.
1. Many newbie traders want to win money and treat trading like gambling. So, they don’t focus on education and practice. They think like: “Good luck will help me to take a huge profit” and hope that their earnings and losses are just the matter of chance.
But this mindset is not for a successful trading. A trading system is what you need. But even successful strategies can include losses. The main secret is that if you have a trading plan, you should pay attention to your overall performance, not just one transaction. You can have 30 losses in a row, but 70 profitable trades can come after them. All you need to do is to learn, practice and analyze your mistakes. Good luck is not a good helper here.
2. You account will be blown if you don’t have a proper trading system. A methodology is essential in the Forex trading. The market can be confusing, the price may be unpredictable. So, you should have a plan that will help you to know when it’s better to enter the market and when you need to close unprofitable orders. Your trading system should bring the order into the market chaos.
Creating of a trading strategy (or plan) isn’t easy, but you just won’t get the sense without it. Treat a methodology as a ship that can bring you to the other side of the Forex market (to the profit, in other words).
3. Some beginners ignore analyzing their mistakes. Remember that demo trading is not the only thing to improve your experience, you should analyze what was done as well. Of course, this process takes much time and it may seem boring and difficult, but it has to be done. Otherwise you’ll never create a profitable trading plan.
So, export your transactions from the trading terminal and start looking what was done wrong. Do your homework, as traders say.
4. Risk and money management are the next points to keep in mind. Many newbies have poor account sizing and risk-to-reward ratio. In fact, risk and money management is a significant part of every trading strategy, but instead of sticking to the plan, new traders react to the market. Starting orders with high leverage on a $500 account is a wrong way. So, you should know how to manage your funds and how to protect the money if you are going to open risky trades.
5. Psychology can seem inessential for beginners, but it has paramount importance. People are emotional, they react to what happens in the world, and it’s a natural thing. Imagine that the price goes the opposite way than you predicted and you start to lose money. At first you lose $50, then $100, and then $1000 more! What would you feel? Fear, pain, greed, hope… It’s like a circle where you want to get your money back, cause these are your own money and they went away in a couple of minutes! So, you have to control your emotions in order not to enter “revenge” trades and lose more money. Yes, you can’t control the market, but you can manage your emotions. Always try to do logical things. Don’t act impulsively and irrationally.
So, if you take these 5 points into account, you will notice that you’ve entered a new level of trading. It means that you are on the right way to being a consistent and profitable specialist.
We wish you to trade mindfully and to reach your goals!