There are few reasons why traders fail in trading and never become full time traders.
The most common reasons why people quit trading is due to unrealistic expectations and not being patient.
Let’s define things why people start with trading
Freedom that allows you wake up, go, travel whenever you want
No boss or anyone else who tells you what to do
All of these points are worth enough to motivate and kick your ass.
When you are motivated things make sense and all your next steps move you closer to the goal you set up. Being motivated and talking isn’t enough. All you have to do is take action, be proactive and do the work – master your strategy, patterns you trade and what’s the most important – psychology.
Once you decide which instrument you want to trade and choose the right timeframe that fits your time, price action patterns you like, stop loss and take profit sizes, risk 1 or maximally 2% per trade, write down your trading plan and someone even its check list – you can start.
And here is the hitch.
Lots of beginners even do not build their trading system and trading plan. They just read few articles about trading, study some price or candlestick patterns and hurry to beat the market without backtesting system and writing down the trading plan. Then they have some winning trades which make them feel like professionals. It usually does not take much time to lose whole capital due to oversizing and overtrading.
What does that mean? They risk more than 2% per trade and entry in every move market does.
The next reason is having unrealistic expectations and missing patience.
Once trader starts to trade and its results are not getting better, he struggles and starts being afraid of next entry due to high probability of another stop loss hit. That’s why I highly recommend writing trades into trading journal, just to see certain behavior and habits which you repeat unconsciously over again and it keeps you on the same place without any move forward. After few loses traders change trading method, add indicators, google for the best trading system and starts again from the zero.
It repeats itself so many times that trader definitely loses patience and motivation from the beginning so now trader wants to forget about trading.
Heck, what happened with your dreams and vision? Why did you give up so easily without any fight? Why the hell people stay more than 40 years at job they hate instead of investing few years into hard self education and some time for changing their mindset into winners one.
Why everyone wants everything right here right now without any work or spent time on learning? It makes no sense. They rather stay the whole life in boring job they hate because it’s more comfortable than studying and learning basics, aspects, technical analysis and other things successful trader needs.
Damn, listen to me. Would you rather invest few years into yourself to fulfill of all your dreams or do not you want it enough to do uncomfortable things, work hard?
It’s your life, not mine. Waking up and looking into mirror and knowing you gave up your dream is like killing yourself.
Hold on and never ever quit. Rewards are actually on the way to you. Just hold on.
Nobody said it’s going to be easy. More than 90% people give up due to bad expectations so be honest to yourself. Set realistic goals and work daily on filling each tasks which follows your vision.
Don’t be the same as others people. Successful people do things that others don’t do.
We all know those phases in different life categories. You are trying, then you stop, you can not move forward for long time and you start be demotivated. Then you quit.
Only 5-10% of people don’t stop and struggle further until they reach it. Patience and being confident allow them to wait until the work is done or until the problem is solved. Weaker individuals just give up..
Choose your side. I already did. You are next.
Wrong expectations and rush traders are killers on way to profitable trading. Be aware it Takes time to be living from trading.
Even the most seasoned of traders can never guarantee with certainty the direction of a market. They can always place predictions on the market. However, to be successful in the long run, the effort has to be from the traders’ end, who figure out different methods of forex trading in different market scenarios and overcome the various hurdles.
The key to making the best returns out of a position is to stay in the market as far as one can and not a moment longer. Traders should always develop the discipline and set targets for their forex trading activity before entering a competitive market like Sri Lanka.
What should be the trading goals that a trader operates with?
Goal 1: Traders should never trade with money that they cannot afford to lose. This is vital to ensure that they do not go bankrupt after a few online trading losses. They should always start with a corpus that can be afforded to be lost while trading.
Goal 2: Setting realistic profit targets should be paramount. Traders should be clear on what they intend to accomplish with their trading account and how they intend to go about it.
Goal 3: Traders should also be clear about the trading volumes they are going to engage in the market every day. They should ensure that at any time only a fraction of their account is exposed to the forex trading market.
Goal 4: Traders should hold a detailed documentation of their trading activity and ensure that every tiny detail of it is carefully scrutinized. This helps traders discern patterns in their trade activity.
Goal 5: It is important for traders to stay on the side of the market momentum and ensure that they derive the maximum gain from it. To accomplish the same, they will have to look out for the trends meticulously and know how a market may sway.
Setting goals while online trading is the hallmark of a seasoned trader. For novice traders, bringing this aspect into their trading routine is highly vital as it aids in long-term success in competitive markets. They can also approach reputed forex brokers in Sri Lanka like WesternFX for the right guidance in developing these attributes.
Finding the trend on a chart can be subjective. The trend determiner indicator examines the graph for you and reveals what the current trend is, based on objective criteria. Using the trend determiner, you can quickly tell if you are trading with the trend or against it. It also identifies those times when the market is not trending. Theoretically, you could buy with the pattern when the bias is obvious and fade the trend when the market is range-bound. For your reference, a comment appears in the top left corner of the chart detailing the current trend.
This indicator has three trend types bullish, bearish, and sideways. It also qualifies trends as being confirmed or suspect.
With a ConfirmedBullish trend, you can expect the price to go higher. When the direction is SuspectBullish price may go higher or lower this indicates the market is considered to be range-bound. Sideways trends are always range-bound, and they can also be confirmed or suspect. With a ConfirmedBearish trend you can expect the price to go lower and if the pattern is SuspectBearish price may go lower or higher, but the market is range-bound. In general, the market is only trending 15 to 30 percent of the time.
This indicator also, allows you to set alerts, you can set alarms to activate when the trend type you wish initiates; you could also be alerted to any trend change. The indicator also has a verbose mode, which prints out details in the journal tab, such as the price and volume of the fractal bar, along with the test bar.
How does it work? Trend Determiner uses fractals as goal post to determine the trend. The fractal indicator is included in every version of meta trader. When a fractal appears the indicator remembers the value of that fractal. If price surpasses the value of a fractal it runs a test. If a bar tests a fractal point and closes on the other side of the fractal, then the test is considered passed. The indicator then checks the volume of the bar that surpassed the fractal value, if the volume on the bar that passed the fractal value is greater than the value of the volume on the fractal the trend is considered confirmed. Logically, it is confirmed because the traders showed more interest at the point where it passed the fractal value than at the point where the fractal was created. To determine the trend the indicator looks at the value of the prior trend and adjusts it according to the results of the test see tables below.
For example, if the current trend is SuspectSideways and a bullish fractal prints at 1.0678 with a volume of 7333 and a few bars later a bar opens below at 1.0669 and closes at 1.0695 with a volume of 9501, this bar would initiate a trend test. Since the bar closed higher than the up fractal, the trend would turn bullish and since its volume was greater than the volume of the fractal bar the trend would be confirmed. The result would be a trend transition from SuspectSideways to ConfirmedBullish.
Modifying the above example, if the volume on the bullish bar were less than the volume on the fractal bar say 6500, then the trend would still transition to bullish. However, it would be suspect since the volume on the bullish bar did not exceed the volume on the fractal that the test ran on. This behavior shows that there is some possible affinity with lower prices since the volume was higher at a lower price, so proceed with caution when opening up a buy in this position.
If you are just getting started as a Forex trader, the 5 tips given in this article will help you out. However, it’s important to keep in mind that they won’t guarantee success. They can save you money, though. Not following any rules may increase your chances of failure. Read on to know more.
The first rule that you need to follow is learning to survive. It’s normal for every trader to lose trades but that doesn’t mean you can’t win down the road. Therefore, what you need to make sure is to keep trading.
Many new traders just focus on a trading strategy that can earn them profit. Although having a solid strategy is of paramount importance, using a good money management plan is also important.
As a general rule, if you want to be on the safe side, the highest amount of money that you can risk shouldn’t be more than 3%.
Use a stop loss
As a Forex trader, the stop loss is one of the most powerful tools at your disposal. The stop loss helps you figure out your risk. So, it’s a good idea to make use of it.
You should be realistic. Unless you are lucky, it won’t be possible that you can close 8 out of 10 of your trades earning a good deal of profit within 6 months. But if you have these expectations, know that you are going to get frustrated and disappointed.
So, what you need to do is be realistic right from the beginning. You may want to figure out your chances of success based on your strategy and experience. Moreover, you may want to determine how much time you have to spend on your learning and trading. Once you have a better idea of your conditions and your trading tools, it will be easier for you to have a lucrative trading strategy.
Stay in Touch With other traders
If you are starting out as a trader, know that you can’t overlook the importance of learning from other traders. There is no doubt that reading Forex trading books is a good idea as they can give you a lot of information in a short period of time. As a result, you can build a strong foundation.
To learn things quickly, another important factor to take into account is regular practice. Your fellow traders can give you valuable information about your strategy and methods. So, you may want to network with other traders and stay in touch.
Keep your Cool
Know that you should not make your trading decisions based on your emotions. As said earlier, it can be a lot of fun to trade in the Forex market, but you may not want to get carried away on the way. You may want to approach trading as a business. It’s not your hobby that involves emotions.
Long story short, these are 5 Forex trading strategies that you may want to take into account in order to save money and be a successful trader.
As far as the market size is concerned, without any doubt, the Forex market is the biggest market around the world. It boasts an average turnover of over $4 trillion per day. With the passage of time, this big but decentralized market became extremely popular. Primarily, this happened because of a number of innovations in the world of technology over the past few decades. Today, with the help of technology, millions of traders can enter the Foreign exchange market. If you are new to this market, given below are 5 facts that can give you a deeper insight into this business world.
1. Small gains add up
Although Forex is one of the top markets in the word, most traders don’t make huge profits in the beginning. At first, they analyze the market and do a few trades with small amounts of money earning small gains. With the passage of time, the small gains add up. This type of traders has a great deal of trading experience.
Actually, your goal should be to use the right strategy in order to keep earning without suffering from huge losses.
2. The Selection of a reputable broker is important
For an ROI, the Forex market offers an endless pool of opportunities. But it’s really important that you sign the contract with a good reputable broker. By good, we mean a broker who is regulated and licensed. Proper research is required to make sure you hire a broker who is professional and established. They should offer different types of services including good customer support.
3. Emotions are not important
By nature, trading is an emotional undertaking as your hard earned money is at stake on the market that is volatile and unpredictable. But if you enter the market with an emotional mindset, you will be more likely to suffer from failures. Actually, when you are emotional, you tend to make rash decisions.
If you don’t want this to happen, you may want to put together a trading strategy based on a trial trading account, which is known as demo account. In fact, learning to trade objectively is only possible if you set your emotions aside when trading. This will raise your odds of making a return on investment on a regular basis.
4. Insider trading is a false belief
Unlike what most people may have told you, there is no truth in insider trading in the Forex trading market. So, it’s important that you keep in mind that you will have to make your decisions on the basis of the current conditions of the market and the most recent news. In other words, there is no magical way or short cuts to make profits.
5. Simple Strategy Works better
Lastly, if you are looking for a solid approach to gain success in this trading world, you should use a simple strategy instead of a complicated one. In other words, you should opt for a simple but tested strategy on the basis of a deep market analysis. You can apply this strategy throughout your trading career.