People hear about forex and they run and buy courses and eBooks for heavy money.They sign up for all kind of services and charts, they pay a lot of money for trainers and classes, learning about MACD and Fibbonaci and all kind of indicators, but they are not taught the basics, they don't know what you need in the first place in order to become a succesfull trader.
1.Will
First of all you need the will to do it...and to learn about it. If you just heard about it and you just want to "give it a try" the odds are that you will conclude after 2-3 weeks or 2 months: It ain't working.I've spent a couple of hundred bucks on ebooks and the best courses on the internet but I cannot trade profitable and I also lost 1000$ on a live account in just one week.
Having the will means opening a demo account, having a notebook where you write down every trade you make and the reasons why you thought that is a good trade. You should also write when you close the trade, why did you closed the trade and if it was a stop loss, limit, or you just decided to close it.
You will feel like a king when you have the first winning trade, but after 5-6 trades that end up with loss you will be discouraged and you will want to give it up.. I know how it feels because I've been there. In that moments you need the will to go on.
2.Discipline
After you learn how to use a chart, a trading station, indicators and you start building your trading system you should stick to it for some time. Follow your system for 1 month, then you conclude if it is bad or good; if it brings you money or it costs you money. After that you will have an idea about how profitable is the trading system you built and after 1 month you might decide to change something. Like...I won't place the stop so close because the market needs some space to bounce before it has a trend or I will not be using so tights limits, because I can see the market moves in the direction I predict and I think I could get more pips if it wouldn't be the limit so close.. and so on... After you decide you have the new trading system, which is the "improved" old one and you trade with this system for 1 month to see where it takes you.You need discipline because you must stick to your system. Don't give it up and try something new after the first 6 loosing trades because that is not enough time to test a system. I consider a system fully tested when I use it for 200 orders at least.
3 Self Control
You will find yourself in front of an order that has 5 more pips before it hits the limit and you will click the mouse and close the order because you will be afraid the market could turn against you and you might loose what you just won.
There are 2 feelings here...fear and greed.
greed- An excessive desire to acquire or possess more than what one needs or deserves, especially with respect to material wealth (by Dictionary.com )
This means your system doesn't deserve more and when you try to close your position before your system does it it means you cheat. You let your feelings take over the control on your mind and over your rational part of the brain. This is a bad thing, because doing so you will develop a pattern which will bring you fake information like the average profit your system brings you. That is altered data, because you interfere. You have to control yourself and not interfere with in your system.
Feelings are good...in music, in painting, in poetry, in love...but in trading are very very expensive and that is why they must be removed when you sit down to your trading desk.
Another aspect of self control is to trade only when you see an opportunity, a signal...don't just trade because you feel like it today. If the market tells you nothing, it should be a golf day or a day to spend with the family. If the market tells you nothing , you should not trade. It is a matter of self control.
4.Honesty
The last thing inside you that is directly linked with your profit is being honest. If a system it just doesn't work, you should be honest and admit it. The market is never wrong...the market is always right, no matter what. It might be irrational, it might be illogical you could get up from your trading chair one day and say ... It doesn't make sense.. Yes, the market often doesn't make sense, but it is right. And if you don't make a profit, your system is wrong, not the market.Arguing with the neighbor, with a brother, a sister, a colleague is a common thing, we usually get over it soon and sometimes with certain people arguing it becomes a pattern. But that is ok if certain limits are respected.
But..
...arguing with the market is very expensive. If the market is right and you are wrong it costs you money, and remember what I said about when the market is right?A L W A Y S...so..be honest: If you are not making profits the system should be improved.
Ovidiu Garvasuchttp://www.my4xGuru.comAsk! We answer!