Many traders fall into the trap of thinking they can get rich overnight with forex: they jump in at the deep end and wind up being unsuccessful. Many dive into live accounts too quickly, lose a lot of their initial money and have no plan or strategy for success. Relying on just their cash or a credit card, many of these traders fail. It seems all too common for new traders to treat forex as an online gambling game and forget that it is a business. I have seen many traders with a lot of potential who decide forex is not for them and leave after hitting a couple of obstacles.
Struggling at the beginning can be bad for a trader’s perseverance, but so can winning early on. It can lead to over confidence. Many early traders think they have cracked it; yet they have no rules, procedures or discipline. In my experience, over confidence and lack of knowledge kill as many accounts as each other.
The solution is to approach trading from a completely different angle.
Pilots don’t jump in at the deep end
Imagine if you had never flown a plane before and you wanted to fly F16 fighter planes: would the military just throw you the keys? No way: firstly, they would check your physical and psychological fitness. Then they would teach you the theory, followed by many years of study and practise on smaller craft and simulators. It would be years before you even were allowed near an F16 fighter plane.
Doctors and lawyers don’t jump in at the deep end
Doctors and lawyers study hard for many years and work dreadfully long hours for considerably low pay once they’ve qualified. On top of that, they leave university with student loan debts in the tens of thousands. They invest a lot of money into their education with no guarantee of employment.
What can traders learn from this?
The majority of new traders come into forex with dreams of “getting rich quick”. They expect to be able to escape the day job in just a matter of weeks. They think they can achieve success by jumping in at the deep end.
Brokers don’t help: they will provide new traders with sophisticated software that they’re not experienced enough to use. If I was starting again I wouldn’t even go near a meta-trader or any trading platform in the first month.
Approaching trading with a bit more careful planning is crucial for your success as a trader. Do your research, take your time and don’t jump into the deep end with high-risk moves and sophisticated software until you know what you’re doing.
Thankfully, the learning curve can be much shorter in trading than in other professions. But you do need to think about trading as learning a new profession. It will take time, effort and persistence. There will be times when nothing seems to be going right. Plan in advance and learn to steer around, over, and through the obstacles.
Trading is a profession. The first thing you need to do is change your expectations. You can get rich at forex relatively quickly but not overnight. Successful traders are in it for the long run: they start slow, deal well with hurdles, build up their knowledge and experience and eventually become very successful.
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