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Business : There Are 5 Ways To Avoid Losing Money When Trading Forex
Jimmy Young CTA, a retired professional Forex trader with over 20 years of hands-on trading experience, offered some of his most valuable principles when trading Forex on a regular basis.
- No micro-trading – Taking a short term strategy with small profit targets will make the broker very wealthy down the road. In order to find success, you need to do away with the eagerness to lock into small profits and make a few hundred dollars a day. Overtrading in the short term is a losing strategy.
- Making the hard decision on who does the trading – Taking trading seriously means taking it upon yourself to make and trust your own decisions and not relying on others. You need to decide whether you trade for yourself or have someone else trade for you, there is no middle point. This means taking responsibility for research, and having confidence to pull the trigger.
- Planning – 95% of new traders lose and then quit, this essentially boils down to them setting the goal of “earning money” and never creating a real plan for success. Setting concrete, actionable goals with realistic time frames and building block steps mean you can get started with a blueprint for trading success.
- Don’t exit trades sub optimally– If you put on a trade and it’s not panning out as you anticipated, make sure you take the correct steps and exit properly, don’t let your damages compound because of anxiousness. On the flip side, don’t let your subconscious talk you out of a winning position because you want to be less stressed. Our mind talks us into turning down amazing opportunities because they put us outside our comfort zone, learn to thrive there as it is a natural part of trading.
- Have courage to accept defeat –There is nothing honorable about getting married to a bad position. It takes real confidence to accept failure, pick yourself up, dust yourself off, and try again tomorrow. Remember that the market can sway wildly, and it does this often, so don’t feel the need to get attached to any specific trade.
Whether you started trading today, or are a veteran to currency rates, the lessons above are a good refresher to what makes a great trader.What defines success is consistent performance on an annual basis, being confident of your decisions in the long term leads to real success.