Merry Christmas and Happy Holidays to allDecember 25, 2015
Forex review for January 4th 2016January 4, 2016
so be thankful to those sharing their findings and views, because in the financial markets experience costs. It costs a lot and can be destructive to one’s capital if rules are not followed or no methodology used. I’m not writing this to promote any of my analysis or tools that I use. I’m here to share a couple of things I have learned over the years that I have learned through others and by losing money to the market.
Through the years I have found out many things that a trader should avoid doing as these increase the chances of losing money in a trade.
- Do not trade when sick. Decision making is critically affected when not on our 100% condition. Do fighter pilots fly when sick? They too have to take important decisions in a very short time period, very much like a trader. So what would a trader put his/her capital in more danger?
- Always use stops. I will never get tired of saying this. 80% of the time I canceled or changed my protective stop levels I regretted it. Yes there are times that a fake market spike or plunge will hit your stop and throw you out of the trade, most of the times the protection is a matter between life or death of your cash but also mental capital.
- Are you new to trading? Start small. Trade small sizes. Haven’t you noticed that all traders who trade in demo platforms are most of the time profitable?why? because they do not trade their real money. New traders should start trading with very low leverage. The damage that leverage does to a trader’s capital, who wanted more than he could handle (mentally), can be destructive.
- Do not guess where the market is heading. Read, read, read, practise, practise,test and then apply. Education is very important. Whether you want to use fundamentals, elliott waves, technical analysis, neuronics, you have to know how your tools work and how to use them correctly. Follow the rules and always test your method in demo accounts before using real money. Do not forget that a successful trader is not the one with 100% correct trades. I don’t believe this is possible. The successful trader is the one that at the end of the month, year, is profitable.
- Do not trust analysts/traders who do not trade with real money. Be very cautious with the social media traders. There are a lot of people who can help you learn, but also there are even more people out there that just show off and delete tweets…for a strange reason twitter traders never post losing trades. Only winning ones. Avoid them.
- Do not always look for the lowest commission.
- After a losing streak, close all positions and take a week off. The market is and always be here to provide trading opportunities.
There are more points that a trader should follow but these are very basic and essential to me. Thank you all for your support all this year and I wish 2016 brings everyone what they wish for.
Take care and see you all next year.