Trading the forex market like all other professional endeavours are coated with ups and downs.The journey of a professional trader is filled with roller coaster bumps. Trading the market with little success for so many years until i turned the table has shown me a lot of Dos and Donts.Here are the lessons.
1- Trading with money you cant avoid to lose.
This is the number one mistake Newbie traders commit along the way.
Using scared money to trade has already prediposed you to failure.
Trading is a game of pschology/Emotional toture,you cant afford to play this game with scared money.
One of the greatest lesson learnt by me on the journey is that, the pschology of trading Demo Account is the same pschology to trade Real Account.
You must accept the reality that your money can be lost at anytime, you must accept the risk.
Trading with scared money will play with your mind, it will incapacitate your ability to make good decisions,it will kick in fear of lossing, Fear of missing Out and a lot of countless negative emotions.
The right emotion to trade is the emotion of detachement, you cant detached if your scared money is on the line.
2- Using Stop Loss is a Must.
Newbie traders are fun of trading without stoploss.
Applying Stop losses to your trade mitigate your risks, i have learnt that a good trading setup will always come with an obvious swings or zones for a safer Stop loss.
Newbies most times make mistake of setting stoploss that can be easily wipe out by the market because of the day to day market flunctuations.
An ideal stoploss must give aroom for flunctuations depending on personal Money Management strategy.
You can be lucky with few trades without using Stoploss but you cant last longer in the market.Market is designed to trick and test your gut. Market is always looking for a good opportunity to trap the newbies.
3- You have to be patience for a quality market Setup
We are lured into the market with the idea of making money,albeit you cant make fast money in the financial market. A good trade takes time to build, develop and stand the test of confluence.
Winning and loosing are randomly distributed in the market, not all setup will work fine, you have to be sickly & stupidly patient, choosing quality over quantity.
A quality setup will have all market conditions alligned. The market conditions that need to be aligned are- Confluence, Levels and Trend.
I was a poor trader back then with baggages of impatience, making quick money, paying debts,fixing my financial problems, quitting my job etc.
I have learnt over times that you dont need alot of trades to make money, you only need quality trades. Patience is extremely a critical trait that must be developed in this game.
The Holy grail of trading is money mamangement, if you failed to learn this from the door, the market will chew your money and spit it, the game is over..
I am the biggest slaughter cow of money management for several years, trading like a machine gunner,taking stupid risks all in the name of making money.
i have been chewed and spit countless times, committing this crimes more than i can remembered. I turned the corner, you can also do. Managing your money revolves around chooing a particular risk -Rewards that fits your personality, a dolar risk- rewaerds system and not percentage risk-reward systems. What can you afford to loose on a trade?