5 Bitter Truths About Trading
Are you still on schedule to meet your trading objectives?
Are your trading systems living up to their potential for back-and-forth testing?
Don’t be concerned if you’re unhappy with your performance.
You may be overlooking some fundamental trading principles.
Let’s look at some truths that few traders would tell you but will benefit you in your trading journey:
1. Making money requires money.
While many traders have successfully begun with modest accounts, they have also had to cope with the pitfalls that come with trading from small accounts.
Trading large and highly leveraged positions, for example, increases the danger of margin calls.
Investing more in the profit/loss of each transaction permits you to make more trading psychology blunders than if you had a larger account that you could afford to lose.
Don’t get me wrong: you CAN begin trading with a modest amount of money.
And bad traders may destroy a huge account just as easily as they can destroy a small one.
However, trading is not a pastime. It’s a company. And, like with most enterprises, considerable profit requires capital. Expecting to make hundreds of dollars every week from a $50 account is unrealistic.
2. You must be there where the activity is.
One of the most prevalent pieces of trading advise is to take advantage of chances when you are most accessible to trade.
This method is acceptable. If you are a beginner looking to get your feet wet.
If you want to improve your trading skills and confidence, you must trade when the market offers the finest opportunity. Most traders undertake their trading during the London and New York sessions.
Just as a doctor would see a greater spectrum of ailments in a tropical third-world country than in a suburban first-world country, traders who trade during more active trading sessions are likely to improve their abilities faster than traders who trade during quieter trading sessions.
3. You will be incorrect. A lot.
Because no single system can be profitable in ALL trading scenarios, even your tried-and-true mechanical methods will make mistakes.
So, how can you keep your business lucrative even when you’re wrong?
Remember that a profitable trader does not have to have a high win rate. If their average profit is large enough, certain traders can be lucrative even with low win rates.
Rather than focusing on winning, learn the art of “sensing” the market.
A profitable trader is one who can swiftly identify shifting market conditions while managing risk.
4. In trading, there is no such thing as a holy grail.
In case you missed the 57,219 memos we distributed, let me summarize:
There is no “holy grail” indicator, method, strategy, or system that will guarantee 100% profits from forex trading.
Write it down or put it on a t-shirt now!
Because there is no holy grail, you can still be profitable. Many traders now trade full-time, and even more are satisfied with steady profits.
The idea is to keep your risk under control. Because it cannot be eliminated, the least you can do is control it through good risk management.
5. Trading is NOT suitable for everyone.
There are numerous reasons why 95% of new traders fail.
On the one hand, becoming sustainably prosperous takes TIME, EFFORT, and a great deal of PATIENCE.
Those who are unable or unwilling to bid on all three will most likely be in the 95% at the end of the year.
It’s also possible that someone isn’t cut out for trading. This has no bearing on the individual or the industry.
You wouldn’t make someone join the military or learn to play the piano if they weren’t interested or qualified, would you?
That is, you won’t know if trading is for you unless you’ve done it for a long enough period of time and put in enough work to try to become consistently profitable.