Common Mistakes: Losing before Learning
I can’t help but mention this one, not because it’s an amazing breakthrough in Forex trading but because it has to be up there in the top handful of common mistakes. Human nature provides most people with greed and lack of patience. If you have read my other articles you will know that these traits do not mix with being a successful trader. They force human error and unfortunately will result in your failure.
This will be a short read because there is not much to say other than warn you and remind you of the consequences. The actual lesson to be learned here is very simple; don’t start trading real money until you have a complete trading plan written down, tested, proven in a demo account and implanted into your brain. I highly recommend starting out your real money trading journey with micro lots and slowly increasing your lot size as confidence builds. Don’t forget, as I mentioned in my article about getting emotional, confidence on a demo account is not the same as confidence on a live account. Once you go live the psychological elements that you have yet to overcome will be new to you and need taming. Confidence in taming this new part of the experience will not be the same on micro lots as it will be on standard lots but it is a good stepping stone to give you a feel of it. Proceed along these steps at your own personal comfort level and don’t rush it.
The problem with rushing things or getting greedy is that you can turn trading into gambling quite quickly. The problem with gambling is that the house always has the edge so you will lose. The problem with Forex is that everyone will have a limited amount of risk capital to attempt heading down the trading path and it’s game over once it’s gone. Your trading career is over before it even started just because you didn’t want to take the time to learn first. It should be clear to you that Forex is not the easiest thing in the World or everyone would be successful at it, right away that should tell you that you need to study first and act later to be in that top 5%.
Time to repeat once more; learn first and act later, don’t rush it or be greedy. Here at ElectroFX I teach my members how to trade using pure price action techniques, this is a style of trading that can be applied to anything and not limited to Forex, you can trade commodities, stocks, indices, whatever you like. This means that if you are able to understand the concepts and succeed you will have a job for life and always be your own boss. Do you think that’s worth taking seriously?