Things I wish I knew earlier.
I have been involved in trading for just over 2 years now and I still remember the early days where stuff made no sense at all and there are some things that I wish I had done differently. In this article I am going to outline some of those things.
Risk management is most definitely one of the most important things to know when it comes to trading on the market. Most traders who just start out tend to not care about risk management, they want to go straight into making the money. When I was just starting out, I did not even know what risk management was. I would load my account with some money, put a position in and a few hours later I would have blown my account. This was really discouraging, and I couldn’t understand how other traders were making money while I was still struggling. Over the years my risk management started to become better and better. You must be able to make room for your losses, accept them and move on. Losing a trade can be difficult because of the immediate impact. Make sure to do your calculations before entering a trade: calculate how much you are willing to lose on the trade plus how much you will gain when it goes your way. Trading is way more than just hitting a buy or sell button.
Multiple Pair Trading:
Most people want to take a trade just because they do not want to miss out on anything. By looking at multiple pairs at once you start to confuse yourself and then you get frustrated because you are missing trades. I was trading more than 6 forex pairs in my first few months and I could not understand why I was failing. I then did some research on the best pairs to trade and I came across a remarkably interesting article from someone explaining why it is important to trade no more than 3 forex pairs. When focusing on less pairs, you remember more about what is happening on all of them. I started to trade XAUUSD, GBPUSD and EURUSD. I did my analysis on them, sure there were less triggers, but my trading improved so much I could not believe it. I suggest that every trader takes 1 pair and really study it, try to tell yourself exactly why you are trading this market.
FOMO (Fear Of Missing Out):
The internet is a place where people can be who and what they want to be. I saw how much money people were making from trading and I wanted to get into it as soon as possible. I quickly came to notice how difficult trading actually is and I didn’t know what to do. People showing off their cars, houses, vacations and so much more, I just couldn’t understand why I was failing with this. This was one of the most difficult things to overcome, I was eager to make loads of money and I completely forgot my fundamentals, I was losing way more than what I was making. Today I look back and smile because I do not care how long it takes, I love what I do, I love trading and it is something I want to do for the rest of my life. It is not the money that keeps me going, it’s the fact that I can work this job from anywhere in the world. You can be your own boss and skip the silly rat race. I recommend you put in the time to really understand every aspect of trading, see where you want to fit in and make sure to not be too hard on yourself. We are all still learning every day. Do not listen to the people on the internet because they are only rich from people like you buying their signals. You see them trading millions and you also want to be in that position. The only way you will succeed in this game is if you do it your own way. Do your research, study what you can and don’t be too hard on yourself, give yourself time because you are human and you are allowed to make mistakes.
These are the things I struggled with the most in my trading career. Trading is a game of patience. You must be able to have the same emotion when losing and winning. When losing a trade, you must take a step back and see where you were wrong. Sit back and re-analyze the market and this way you will never make the same mistake again. As long as you have good risk management you will have room for error, but you will still be profitable.
Trading is difficult – it was never meant to be easy. You have to put in the time and effort, you have to go through sleepless nights where you are constantly studying the market, even if you just sit in front of a clean chart I promise you will start to see something. Give yourself room for improvement and don’t jump the gun. Trading is a career and not a slot machine.