This is a great article from one of my private students, Jeff L.
First published in 2015 BUT whenever I speak with a trader who finally “gets it” and they now KNOW what they have been doing wrong, 95% of them admit that this is one of the major reasons.
This sums up EXACTLY what I believe is the reason for most peoples lack of success. They are playing at trading. It’s a business, treat it like one and give yourself a REAL chance to succeed:
I was just about to write another of my e book epics 🙂 & then this arrived from Jeff L and says in 60 less pages a great deal of what I want to get across to new & inexperienced or “long in the tooth” unsuccessful forex traders.
I constantly remind you of the need for patience & discipline & perseverance, but I am coming more & more to realise that it is equally important to do the physical & psychological ground work & preparation than it is to open a demo or (heaven forbid) a real money account.
Here’s Jeff’s article: Treat trading like a hobby and it will pay you like a hobby. Treat it like a business and it will pay you like a business.
These are things I have learned that have made a tremendous difference in my trading:
Seek the help of those that have gone before you.
Find a mentor, like Marc Walton, who has a heart for teaching and is willing to show you the ropes. They have already been down the road you are travelling on. They can help guide you through the pitfalls, learn from their mistakes, give you wise advice, teach you their methods they are already using to be successful and encourage you along the way.
Trade like a pro Listen to the advice you are given by your mentor, put it into practice.
Psychology. Trading is such a psychological game. Everyone in the market is human, and humans repeat the same behaviour. Learn about market psychology and learn about your self. Know the parts of your personality that are beneficial to trading and the ones that are not. The ones that are detrimental to your trading you have to keep in check while you are trading.
Patience. This is a tough one for me and a lot of other people. I want to be able to turn on my computer, jump in and make 100 pips within a minute. Wait for the trades to come, don’t force trades, they will usually cost you money and confidence.
Develop your system. Once you have a proven system, trust it and wait for your setups. Plan the trade and trade the plan as Marc says.
Virtual money. Hone your skills in a virtual account. Much easier on your pocket to make mistakes and learn with virtual money.
If you are not sure about a trade setup, let it go. Even if the trade works out, you still didn’t lose any money. The trades will come.
Avoid trading at “crazy” market times, news, etc. Trade when conditions are more predictable. It’s easy to look back and see the huge move, but you probably would not have know to get in at that time.
Keep it simple, don’t over complicate trading or over analyze your charts.
Spend a lot of time pouring over your charts. Get to know the pairs you trade and how they react. You will develop an intuition about them and start to see the trades set up. Start trading one or two pairs until you know them well and are comfortable. Then add more if you wish. I know people who make a nice living off of trading one pair.
Money management, money management, money management. Learned this the hard way. Don’t risk any more than 2% of your account on any one trade. It is amazing how fast months of gains can be wiped out.
Your #1 goal is to protect your capital.
Enjoy what you do. I love trading, I am fascinated by the markets and I am passionate about learning all I can about trading.
Treat it like a business. I heard this and it is true:
Treat trading like a hobby and it will pay you like a hobby. Treat it like a business and it will pay you like a business.
Thanks, Jeff Larson
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