Early on in my Forex journey, I would look for setups on every single pair, from the most common to the most exotic. The pairs very few traders even knew existed or cared to look at. This, of course, has a few benefits such as:
– Always finding a setup.
– Trading frequently.
– You feel more productive.
Cut your losses short, let your winners run. While this piece of advice is well known, you will find that the majority of retail traders do not put this into practice.
Instead, they hope that losses will turn into profits and cut winning trades because they fear that the market will turn against them. This type of behavior is often because of a traders psychological pitfalls.
I mean that literally. To every trader out there that thinks you place your trades for free, allow me to disabuse you of that notion immediately! IT COSTS MONEY TO TRADE. And no, I’m not talking about your losses.
When you place a trade, ANY TRADE, whether it was a mistake, a bad trade, or a good trade, your broker will either charge you a COMMISSION and/or a SPREAD. There is no avoiding this. You have to pay to play.
For years, I have struggled with the concept of full-time trading. Back in university I was keen on the idea, and I still am, the only thing is what that transition looks like.
Usually, people begin by trading part time i.e. when they can during their day or week. This means they don’t learn everything required as quickly as others who trade full-time.
Today we talk about a topic that traders are divided on. So before I even start, I want to point out that if something is working for you, STICK WITH IT! You shouldn’t fix something that isn’t broken. But if it is broken, you can possibly try another way? Just saying.
This is very much a beginner topic, but I think it is essential to learn about the market open and close because trading mistakes made during these times can be avoided, as long as you are aware of them.
To start, I want to point out that the Forex market is not the same as the stock market in terms of when the market closes and opens.
Often as a Forex trader, the first thing you want to do is just make money without really looking at the reasons why you may not be making money, or rather the reasons for losing trades.
Now, don’t get me wrong it is vital to focus your attention on having great winners, but it is equally important to focus on the small losses…
In this game, it’s important not to have eyes bigger than your stomach. Don’t take on risk you can’t stomach. I heard of a trader called Jason Leavitt on a “Chat with Traders” podcast some years back who said at the beginning of his trading career he could’ve been trading $50,000 account and have one trade floating an $8000 loss without phasing him.
Trading, like anything in life, needs practice if you want to become good at it. Luckily, with modern technology, there are ways to practice without spending any real money. Without the added risk, trading a demo can help traders hone their skills and become better by first losing fake money and not real money.