Most traders don’t start making money until they mature as a trader and gain a better understanding of the ‘big picture’. If you’re reading this, chances are you’ve been on, or are on, this journey yourself and went through the wild volatility and excitement of the crypto bubble, or SNB currency peg where you could make several hundred dollars in just minutes. Having been through that it’s easy to fall victim to the allusion that trading is a get rich quick scheme that’ll enable you to retire in a year or two.
These expectations have led to the demise of many ‘traders’ over time, so here are a few tips to keep you on the right track, so you can trade the Forex market like a grown up.
-Don’t fall for the people that promise you’ll make loads of money if you just sign up to their newsletters, seminars, premium services, etc. Instead, look for reliable resources to learn from. An easy rule of thumb is the more the hype, they higher the probability of it being a scam
-Stop thinking that you’ll double or triple your account in less than 12 months. Even if you do chances are you’re probably taking on too much risk. 20-25% annualised return throws you into the league of trading legends like Soros and Buffet.
– If you don’t know what your edge is, you haven’t got one. So stop trading until you do.
-If you have to ask other people what they think you should do on a trade. Stop! It’s time to develop a trading plan for yourself instead of trading the opinion of others.
–Forex tips are for waiters! Entry and exit signals built upon a solid methodology are for traders.
-Don’t get excited about one winning trade. Instead, trade a position size where each trade is just one of the next several hundred and has a little impact on the bigger picture. If you see someone celebrating like it’s the AFL Grand Final and the mighty Carlton Blues just won, then chances are they don’t have many winning traders or they’re trading too big a position size.
-Don’t confuse one good trade or a trending market with being a good trader. You won’t be able to tell how robust your system is until you’ve successfully executed your strategy through bull, bear and otherwise market conditions profitably and with minimal drawdown.
-If you’re not willing to put in the hard yards of learning how to trade, you won’t make it. Simple. You’ll only make in profit what you put in with effort.