Trading for Newbie – There always a first time for everything. Likewise with traders in forex. They have a wrong perception about forex trading. They think trading in forex is a gold field and a quick way to get rich, but the reality is not that easy.There are many traders who go bankrupt, fall into poverty. Based on one article that 7 of 10 traders lost their capital, and 10% of traders went bankrupt, ran out of capital.
What is the cause of the failure? Is it because they are not smart enough, or is their capital too little? Even though they are highly educated, and full of consideration in making decisions.
The Concept of Wrongly Taken Trading for a Newbie
There are several concepts that are wrong in the mind of a newbie trader , namely.
1. Forex trading is a shortcut to getting rich
Forex trading is not a shortcut to getting rich. Skills, knowledge, and time needed to grow and develop in the forex trading business. If you come from trading, your closest possibility is bankrupt immediately.
2. We can lose all capital in an instant
In forex trading, we can lose all capital in an instant, if we allow unlimited losses.Many tools to manage our capital to survive, even develop. One of them is stop loss. Trader’s understanding of margins, leverage, and other tools will prevent traders from making mistakes.
3. Forex transaction business is gambling
Every business we do will be a gamble if we don’t understand the strategy and how to develop the business. The fast-food fried chicken company employee who has worked for decades and plans to resign then establishes publishing is gambling, because he is blind about publishing science, he understands more about choosing good chicken, and processing it into crispy chicken.
4. There is a person or institution that regulates behind price movements in the forex market
The movement of the forex market is very large, the velocity of money in the forex market reaches 20 trillion per day. How difficult if the movement is controlled by a person or an institution.
Another fatal mistake for newbie traders is
- They think that they can transact with 80 -20 accuracy, meaning 80% win, and 20% lose.
- They think that they can get 100,000 USD from 10,000 USD capital within 6 months.
- They think that the forex market is always predictable.
- They think that being able to transact with a 100% accuracy system, buying 100 wins 100.
- They think they can resign from their old jobs as accounting, tax staff, IT staff after studying for 6 months then successfully working as a full time trader.
The main basis of forex trading is not like definite science. We are not always profitable or always lose throughout the transaction. Trading is a probability, there is a possibility of losing 50% and winning 50%. As a newbie trader you must have a stable mental and emotional state, and you must have the right way of thinking about forex. If you are mistaken you will definitely go bankrupt and fall apart.
As a newbie trader, you have to learn money management. You will not make a profit if the capital has run out, therefore, you must learn to avoid the loss of capital as early as possible. Look for a method of dealing that best suits our capital style and capabilities.
Learn by playing simulation. However, just a simulation game, it can’t show pressure and emotion when we transact with “real money”. Last advice, do not merry with your trade , do not marry this business, you have a life and family waiting at home. Don’t waste your life and family. Trading for Newbies