We can all agree on one thing. Most of the new traders want to trade to get rich quickly, is that correct? This is typical human speculative behavior. Social media hype is making trading look easy, but that gives very false impressions. Trading can be very rewarding but like any profession, it’s very important to have a strong desire to learn rather than just dive in, or follow flashing headlines 100% in one month. The truth is there is no such a thing without the big drawdown and it could wipe off your account. If you have already made losses, treat losses as an important part of learning.
Unrealistic expectations of getting rich fast and not understanding what it takes to be successful often result in bad trading decisions, bad experiences and big losses. You can simplify your learning curve for trading by tapping into the experience of successful traders, but don’t just expect to mirror their methods, you need to find what works for you and make the methods your own, and the most import thing you need to apply your own money management according to your equity size.
Can you be attached to these experiences?
Media hype examples “Just made $2000 in the last 15 minutes – did you get some too” and “Our methods will make you rich – 90% of our trades are winners”.
Many amateur traders believe this and get sucked into this environment because it looks easy and they don’t want to miss it out. That is not trading – its typical speculative behavior, or even gambling – but do keep in mind that the house generally wins.
Some new traders have “luck of beginners” and start to make some profit. This is not uncommon in strong trending markets driven by hype – ride the trend. The trend eventually completes, and the traders get caught on the wrong side of the market and start making losses. Confusion leads to disbelief, despair, panic, and capitulation (often just as the trend changes).
A not uncommon thing that the traders try to average the losses by adding new positions to the original position not realizing that the bigger trend has changed against them.
The losses can magnify to a point where they can become catastrophic, which leads to not just a large financial loss, but also significant emotional stress.
The emotional component related to trader psychology has the potential to be more damaging than a financial loss.
Sometimes this can lead to giving up on trading, which should not happen, because trading is, and could be very rewarding for you, you just need to apply three basic principles and not to expect overnight results. To become profitable, even with a good mentoring it will take you years if you don’t apply this three basic principles of trading:
Applying proper Methods and Strategies (using Technical Analysis of course)
Good Money Management
Discipline to manage your emotions and working on your trader mindset (easy to say, but far away from easy to apply even for experienced traders)
Top-down trading technical analysis, we developed over time, have all three basic principles compiled. Analysis starting from the higher time-frames will lead you to reveal of the key breakout, support and resistance level which will give you high probability entries with the low risk (proper money management), but this approach also requires discipline. The three basic principles compiled, but also common belief this has to lead to a 100% winning strategy. NO.
It should lead to a long-term profitability and it should change your mindset in trading, meaning not to give up after period of drawdown, and managing your emotions in a difficult trading periods and difficult market conditions such as this is (take a look at the DXY USD index monthly chart – consolidation or continuation-long or short the USD against the other market pairs?), which for sure will come.
The bottom line, hope the common beliefs such as:
the trading will make me rich in one week,
it is a piece of cake look at this media hype “Just made $2000 in the last 15 minutes “
I will learn to trade easily
are not the part of your mindset anymore and we greatly encourage you to take our service and two or three more at the same time, not just to compare it, but to learn as much as you can from experienced traders and to see that they are also driving through losses, as a part of their strategies and how they emotionally cope with it.
The broker of our choice! Open the account and get the discount for our services!
Through time we have developed a very respectable trading strategy which defines Entry, Stop Loss and Take Profit levels with high accuracy and allows you to make position Risk Free. We are publishing 5-10 trade alerts per week via real-time Private twitter feed!
