When it comes to being a trader, unless you possess the nerve to buy and sell currencies and put your own money at risk, you can have all the foreign exchange trading knowledge in the world, and you still won't be successful. As they say in the lottery, "you gotta be in it to win it," which isn't necessarily easy when you're buying and selling with your own real money at risk.
There's no doubt you'll feel intense anxiety and fear during this strong moment of truth. Do you have what it takes? You need to be able to feel the fear but act simultaneously, like a fireman does when he is frightened but runs into a burning building anyway to save a life. If you cannot overcome or at least accept your fear, you will not be a successful trader.
After you learn to accept and control your fear, the process becomes easier and, in time, there is no fear left. However, it's the opposite effect, your overconfidence, that can become an issue. You don't want to lose focus on the risks that you're taking on a daily basis.
For traders trying to move forward, the inability to initiate a trade or close a losing trade can cause serious psychological problems. If you catch these potentially damaging traits beforehand, you can prepare yourself for your first trade and learn correct trading habits from day one.
Begin the process by analyzing yourself. Do you find you can often control your emotions to execute trades, even if you're working under incredibly stressful conditions? Are you the kind of person who takes extreme risks because they're overconfident? These are questions you need to answer before making your first real trade so that you can correct any bad habits before you make a mistake like not being able to take a risk or taking too great of a risk because you're overconfident. These gains and losses can make or break your trading career, ending it early or allowing you to raise capital.
And while learning to take a risk can be difficult, the journey doesn't end there. The next step is just as, or more difficult than learning to put your career and money on the line. Once you're in the trade, you need to stay in the trade and, when trading foreign exchange, it's easy to leave the trade soon after you enter when it's not working. Those who have been successful in non-trading ventures find this concept difficult to implement.
Real estate tycoons, for example, can easily make a fortune by sticking it out through bad times and selling during boom periods. This "hold on until it comes back" mind set doesn't' work as well in foreign exchange because the currencies are often in long-term, persistent, directional trends and it's easy for your equity to disappear before the currency comes back.
Another aspect revolves around learning to stay in a trade that's working. One of the greatest mistakes in trading is closing out a winning position with no valid reason, most often because of fear. You're constantly asking yourself questions like, "what if news comes out and you wind up with a loss?" The reality is that this is unlikely to happen because if news does come out in a currency that is going up, it's more likely to be positive than negative.
Though your fear can be a great annoyance, don't fight it but accept it and move on. Determine an exit strategy based on the actual price movement rather than your subconscious worries. Like Garth says in the movie Waynesworld, "live in the now man." Don't waste time worrying about what could be. Pay attention to your start and come up with a rational objective exit point based on reality.
Another reason trader close a winning position too early is because they become bored with it because it's not moving. In a football game, after a running back breaks free for a 50-yeard gain, he comes out temporarily for a breather. After this brief rest, he reenters the game posing a huge threat to the other team to gain more yards because he's well rested. The same can be said about your position. When it takes a rest after a winning move, the next likely step is more gains, so why bother closing it?
If you're able to stay strong under fire and remain patient, foreign exchange trading may be the job for you. If you find that you're reckless and often overconfident, you might need to tone your ego down a little, but we can help you to make these adjustments. If you become nervous at the thought of putting your own money at risk, it's only because you lack the knowledge to be confident in your own decision making. You can gain this knowledge through study and focus with a bit of patience.
Most new traders think that the only tools you need to make a profit trading foreign currencies are charts, technical indicators and a small bankroll. Traders with this attitude are most likely to lose all their money within a few weeks or months. Some may be successful initially, but in time they will lose. It is the minority of traders, those who possess strong money management skills, patient and a market niche, who go on to be the most successful. If you rely too heavily on technical tools, your chance of succeeding is 500 to 1.
To be successful you need to acquire knowledge, which takes hard work, study, dedication and a lot of focus. Build a solid foundation upon which to work with by not taking any shortcuts while gaining this knowledge and you will be successful in the future.
Stephen Ng has helped hundreds of Internet marketers create wealth from their own online information product empire using article marketing tactics, PPC, SEO, JV and other secrets and techniques. Get his amazing massive giveaway package worth of 597$ at his site: http://autopilotcashsecret.com/greatgiveaway/
There's no doubt you'll feel intense anxiety and fear during this strong moment of truth. Do you have what it takes? You need to be able to feel the fear but act simultaneously, like a fireman does when he is frightened but runs into a burning building anyway to save a life. If you cannot overcome or at least accept your fear, you will not be a successful trader.
After you learn to accept and control your fear, the process becomes easier and, in time, there is no fear left. However, it's the opposite effect, your overconfidence, that can become an issue. You don't want to lose focus on the risks that you're taking on a daily basis.
For traders trying to move forward, the inability to initiate a trade or close a losing trade can cause serious psychological problems. If you catch these potentially damaging traits beforehand, you can prepare yourself for your first trade and learn correct trading habits from day one.
Begin the process by analyzing yourself. Do you find you can often control your emotions to execute trades, even if you're working under incredibly stressful conditions? Are you the kind of person who takes extreme risks because they're overconfident? These are questions you need to answer before making your first real trade so that you can correct any bad habits before you make a mistake like not being able to take a risk or taking too great of a risk because you're overconfident. These gains and losses can make or break your trading career, ending it early or allowing you to raise capital.
And while learning to take a risk can be difficult, the journey doesn't end there. The next step is just as, or more difficult than learning to put your career and money on the line. Once you're in the trade, you need to stay in the trade and, when trading foreign exchange, it's easy to leave the trade soon after you enter when it's not working. Those who have been successful in non-trading ventures find this concept difficult to implement.
Real estate tycoons, for example, can easily make a fortune by sticking it out through bad times and selling during boom periods. This "hold on until it comes back" mind set doesn't' work as well in foreign exchange because the currencies are often in long-term, persistent, directional trends and it's easy for your equity to disappear before the currency comes back.
Another aspect revolves around learning to stay in a trade that's working. One of the greatest mistakes in trading is closing out a winning position with no valid reason, most often because of fear. You're constantly asking yourself questions like, "what if news comes out and you wind up with a loss?" The reality is that this is unlikely to happen because if news does come out in a currency that is going up, it's more likely to be positive than negative.
Though your fear can be a great annoyance, don't fight it but accept it and move on. Determine an exit strategy based on the actual price movement rather than your subconscious worries. Like Garth says in the movie Waynesworld, "live in the now man." Don't waste time worrying about what could be. Pay attention to your start and come up with a rational objective exit point based on reality.
Another reason trader close a winning position too early is because they become bored with it because it's not moving. In a football game, after a running back breaks free for a 50-yeard gain, he comes out temporarily for a breather. After this brief rest, he reenters the game posing a huge threat to the other team to gain more yards because he's well rested. The same can be said about your position. When it takes a rest after a winning move, the next likely step is more gains, so why bother closing it?
If you're able to stay strong under fire and remain patient, foreign exchange trading may be the job for you. If you find that you're reckless and often overconfident, you might need to tone your ego down a little, but we can help you to make these adjustments. If you become nervous at the thought of putting your own money at risk, it's only because you lack the knowledge to be confident in your own decision making. You can gain this knowledge through study and focus with a bit of patience.
Most new traders think that the only tools you need to make a profit trading foreign currencies are charts, technical indicators and a small bankroll. Traders with this attitude are most likely to lose all their money within a few weeks or months. Some may be successful initially, but in time they will lose. It is the minority of traders, those who possess strong money management skills, patient and a market niche, who go on to be the most successful. If you rely too heavily on technical tools, your chance of succeeding is 500 to 1.
To be successful you need to acquire knowledge, which takes hard work, study, dedication and a lot of focus. Build a solid foundation upon which to work with by not taking any shortcuts while gaining this knowledge and you will be successful in the future.
Stephen Ng has helped hundreds of Internet marketers create wealth from their own online information product empire using article marketing tactics, PPC, SEO, JV and other secrets and techniques. Get his amazing massive giveaway package worth of 597$ at his site: http://autopilotcashsecret.com/greatgiveaway/
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