Let’s picture our trading.
Let’s imagine that I and you are going to become professional Forex traders. I wonder what we should do in this case. So let’s picture the detailed list of our trading actions.
So we collect information on Forex trading. We buy books, attend seminars, read articles. It goes without saying that we begin to trade, using this “new” knowledge. We are consistently losing money and then we begin to understand that we may need more knowledge and information.
As the result of all of this mentioned above we accumulate more information. We switch to other trading instruments. So we simply return to the market and sell or buy using our “updated” knowledge. But the market “hit” us once again and we begin to lose a considerable part of our confidence. Fear begins to seize us once again.
It’s quite natural that on this stage we are starting to listen to analysts and other traders. Then we return to the market and continue to lose money. Once again we are changing trading tools. We are looking for more information on trade. I’m tired to repeat that after this we return to the market and continue to lose money. We become “overconfident” and market “punishes” us.
Then we begin to understand that trading success requires more time and more knowledge than we have expected. This understanding is very essential because many traders are likely stop at this stage.
We are becoming more serious and start concentrating on the study of a real methodology. Having realized this we trade on our methodology with some success, but any way there’s an annoying feeling that something has been missed. So we begin to understand that there should be rules for the application of our methodology. Because of this we are temporarily suspending our trading in order to develop and explore our rules of trade.
We start trading again and this time we are using all the application of rules and certainly we achieve some success, but often we still hesitate when it is time to execute the transaction.
We add, remove and adjust our rules as we see the need to be more experienced in the rules. As you might have guessed we return to the market and continue to lose. Then we are beginning to bear responsibility for the results of our trade, because we know that our success depends on ourselves, rather than on the trading methodology. We continue to trade and become more experienced with regard to our methodology and its rules.
When we trade, we are still inclined to violate our rules and our results are unstable. But we know that we are close to our goal. Now we see the importance of following our rules as we see the results of our trade, when we do not follow them.
As in any other sphere of our life foreign exchange market needs some knowledge.
Of course, one can start forex trading and get quite successful about it. However sooner or later the losses will come. This is when one might think “Why didn’t I start with a nice forex book?”
This does not imply that after reading even the best forex book you will start closing trading positions with huge income, but this info will save you from
lots of troubles.
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