This article is going to share the five things you need to know when Forex trading; lessons that many wish they had knowledge of before they began their investment journey, especially when trading in cryptocurrencies.
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One quote that often comes to mind is: “Forget about the money – start small”. Certainly, we’ve all heard this but sometimes we don’t heed that call, even when our private, indoor voice is telling us to take it easy. But more often than not, new traders get caught up in emotion and excitement and smart trading goes out the window. Here’s the thing: It’s great practice to trade small in the beginning to get use to the markets and trends, the tools, and your newly acquired and ever-changing trading style.
Don’t go off thinking you’re all that. It’s hard to hear but if you’re not listening here then you will be humbled by the market. If you’re thinking, “I want to do this as a long term thing. I’m not looking to buy one cryptocurrency and then sell it and that will be over.”
If you are into trading and you want to make decent money in the long term – maybe even enough to cover retirement, then it’s important to do this right. No one comes out of the gate as a trading pro. Even the most brilliant writers need to start with learning the alphabet first, right? Take your opportunities where they come – but start small.
Reducing the pressure of the money
If you are starting with a big account relative to your net worth, you will feel the pressure when a trade is going your way or think “this is a lot of money I will take it” and you want to take the profit quickly. Vice versa, you will feel the pressure when it goes against you. “Oh, I don’t want to lose that.”
You need to redefine your crafts and your skills rather than looking at it from a profit perspective. So, starting small is just the most significant thing, and when the question comes, “when should I wrap it up?”
You will know when you have made good progression, you have got this excellent consistency, loses are coming in, but you are capping them off early, letting those profits run as well; You are picking the right trades to be in; You are not over trading all those hundreds of things you can go into.
So starting small looking at it from a perspective of “hey am doing a skill, am improving a skill here and not looking to make money.”
- Focus on risk:
Forget about the size of your account, just focusing on the number of trades or group of trades. After psychology, the risk from an operations and skills perspective is the most significant factor for successful trading. Risk management is massive; You can have the best system in the world; If your risk management sucks, then you will blow up. It just as simple as that, unless you have a 100% system which you don’t have, you could blow up on one losing trade if you don’t manage your risk.
Focusing on the risk and understanding here what is the worst-case scenario on a trade is the way to go. Establish your position size; max loss per trade; Some trades per week, and so on.
You should know where the hidden risk is, are you holding a trade overnight when your strategy says otherwise?
Risk management is the name of the game when all is said and done.
- Filter out the noise:
There is so much information on television, magazines, newspapers, newsletters, and email gurus. If you want to follow somebody stick to one, keep it to one thing or method that you will follow. With so much noise, you almost do yourself a disservice, and the only way is for you to filter through all the noise. So filter out the noise and have a clear perspective towards the market.
- Stick to one method, strategy or style: The mistake I made was trying to be a jack of all trade master of none should I say. Sticking to one thing which could be altcoins, privacy coins, Cannabis coins, or Bitcoin BTC; Seeing how you do, analyze your performance.
The point is sticking to one method and just sticking it out for an extended period. That’s one big mistake I see people make in trading.
- Be in the game for a long term:
In another way, we can say, to be in the game for the long run. Getting rich quick does not exist; If it does, then it is luck. Very few people come into the game and instantly pick it up straight away, but yes there will be the odd one or two as there have always been in all distribution curve but expect to be in it for the long term.
In Conclusion
Putting things in perspective, it makes sense to start small. I want to be here five years down the road; I will start small. I need to focus on my risk; there is no point in me overdoing the risk. I want to have my method, my strategy; I don’t want to be relying on other people and doing all those things. So yes, will filter out all the noise, am just going to have one newsletter or one type of asset I lookout to learn from. Sticking to one method again, I need to master one or discard everyone else that is not for me before I move on to the next, i.e., the famous theoretical approach.
I believe I was probably told these things when I started trading and wished that I had taken them more to heart to shorten that learning curve. I think if you take these to heart and you run by this, then the learning curve will protect you for many years and shorten it right down.
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