Learn Forex Trading Properly
Hello, Traders. This time I will tell you about my trading behavior in the past. The time when I was a newbie (although at this time it was not yet said to be expert ) in the world of forex trading which was full of excitement.
I got to know forex in 2005. I spent time studying various types of analysis and trading techniques in less than a year. I don’t care even though at that time I was still a marketer in a futures broker. For me, what is important is learning first. Look for customers later. After all, at that time I was not paid, only got a commission from my customer transaction, even if I managed to get a customer.
Predictably, the behavior produced lectures and lengthy advice from my supervisor first. He also became more convinced that he was wrong in recruiting people. But he apparently saw another potential for me, so finally in 2008 he recommended me to become a market analyst staff at the broker. But that ‘s another story.
In 2006, I ventured to trade with joint venture capital with three friends.In my first few months of trading real accounts, I considered my trading performance to be “extraordinary”. Why? In the first three months, I managed to record successive profits of around 30% of initial capital.Although it has been divided into four, as a fresh graduate at that time the acquisition of that amount was big enough for me.
My confidence increases, even tends to be angry. I feel that I’m at the top of the world. Imagine, in three months of trading I never even cut-loss. Note yes: NEVER. That means 100% of the transactions I made in the three months resulted in profit.
Unfortunately, in the 4th month I was unable to maintain achievement. Floating loss dragged on until finally I declared myself unable to manage our capital anymore. Fortunately, it was profitable, so if we lost a total of “only” about 50% of the initial capital (compare with most traders who have to get margin calls ).
At that time I drew the conclusion that the knowledge I obtained was not complete. But it turns out my mistake is more than that. My main mistake is the wrong mindset and improper learning.
Like most novice traders, at that time I was too focused on getting fast results and – of course – a lot. At that time forex was described as a form of business that offered fast results. In fact, even today the public mindset is still the same about forex.
It is true that currency price movements are far more volatile than stocks, for example, so the opportunities created are far greater. This is where the “poison” is. Ambition to get big profits in a short time often makes a trader open a transaction that is too large. Whereas behind the huge potential profit, there is also a risk that is not less important. That is why it is highly recommended to limit risk through proper capital use arrangements (set the number of lots) and appropriate risk restrictions (risk management). Unfortunately, the desire to make a profit quickly makes many traders forget the very basic things in this trading.
It was also the “sin” I did first. In my mind there is only “profit, profit and profit”. As I said above, in the first three months of my trading experience I have never even cut-loss. Never limit risk with stop loss.Even though no one can know exactly where prices will move. That is, we can experience losses at any time. Anticipation of this is risk management, which many traders forget.
In addition to the mindset , many traders also go through the correct forex trading learning process. Most want to be able to directly trade with strategies or systems that are ready to use. That too was my sin.
I used to spend too much time studying various trading strategies or systems without taking the time to learn the basics of trading. I even just understood the basic concept of the trend after two years of plunging into the world of trading, which I unfortunately learned after having “dropped”. Imagine, there are traders who dare to trade even before they understand what a trend is “life” from price movements.
I often analogize learning forex trading like studying martial arts. There is no way for a karateka to hold a black belt without going through a long process of training ranging from white, yellow and so on, unless he is an important person appointed as a certain honorary member of the college.
Learning to trade too. One should learn the science of trading from a competent source and the right way too. Learn the basics of trading first, namely trends, support and resistance. After you have mastered these three elements, then you can proceed to other materials such as technical indicators, price patterns and others.
Most mistakes that traders make are directly “jumping” to the trading system or strategy . Even though to be able to know in what conditions a trading system can be used or not, we must know what is the basis of the trading system. Well, to find out the basis of the trading system, we inevitably have to understand the basics of trading.
Have a good study.