1. There Is No Absolute Truth
What is suitable for one trader is not always suitable for another. This happens because we are different. That is why you should not accept any information you receive from more experienced traders for the absolute truth.
It doesn’t mean you shouldn’t listen to their opinion. You definitely should! However, to make sure the knowledge and skills that another person gives you have the maximum effect, you need to try them out and adapt them to your needs.
For a better effect, use several sources:
- Find yourself a mentor;
- Read the books of different authors;
- Choose several informative blogs and forums, etc.
Use the strategies, methods and tricks that are suitable just for you and create your own unique system.
2. Remember Tomorrow
If you have a bad day on the market, do not despair. You will have tomorrow, the day after tomorrow and many more days to tip the scales. If you have a losing streak, close your charts and forget about Forex till the next morning. Take a walk to clear your head or choose another activity that you enjoy.
Many inexperienced traders are mistaken to believe that in the case of losses the market owes them something. After one or more unsuccessful trades, they often open a rash position just out of revenge. Unfortunately, such decisions are made on emotions which almost always eliminates the positive outcome of the transactions.
Just remember that not every position will be successful, not every day will be profitable. This is true for any kind of business - no one achieves success in one day. It’s a process. Estimate your overall result, not one unsuccessful day.
3. Best Trade - No Trade
On Forex, the abilities to open successful trades and refrain from trading are equally important. When evaluating your overall performance, both your successful and unsuccessful positions count.
There may be several reasons for avoiding the markets:
- Major news releases when you don’t have a suitable trading strategy;
- Bad emotional state, which almost always leads to reckless trading decisions;
- Sideways trend on the market.
If there is no clear ascending or descending trend on the market, the trades you’ll open will most likely be unpromising. It seems harmless at first glance, however, it has its negative consequences:
- You use in vain the margin that you should keep for a more promising transaction;
- Time, attention and effort that you spend on such a position is better spent on rest, study or other useful activities.
If you are not sure about the prospects of your transaction, it is better not to open it at all. Risk-to-reward ratio in this case is not worth it.
These are not all things to learn before you start trading. I will tell you more in the next article.