By Admiral Markets
Dear traders,
Most people set out to trade their own way and in doing so, end up being with the crowd that loses money.
The questions is why?
Well, perhaps when all your trading buddies and all the analysts you follow are talking about EUR going for 1.2000, it is hard to take a contrary view right?
It is quite easy to say, “I’ll just follow the crowd and know when to exit my trade”.
Free Reports:
But making that happen is something else entirely.
And acting against that impulse for perceived easy money is hard, which is why crowds move together.
Most hedge and mutual funds are followers too.
They also take hits, along with retail investors and traders:
… just not usually to the extreme of the uneducated trader…
…who is more likely to completely wipe-out his or her account when things go bad.
Anger is the worst possible emotion to apply to your trading:
But then let’s face it – generally speaking, emotions per se have no real place in Forex trading.
Revenge trading usually occurs after a loss – to win back the money you’ve just lost, by raising the leverage and making impulse trades.
If it wins then rest assured, that you’ve effectively won by gambling and you may try to repeat that win by gambling again.
That’s bad, really bad – just ask the average casino player how well they do financially over the mid-to-long term.
Most aspiring full time traders, think they could live by trading off 10k USD.
Well, they are partially right because they could live…
…but would probably be homeless.
Until you have enough capital to ensure you get two-to-five per cent return on investment per month and can pay your bills – don’t even think about full time trading.
Having a golden reserve, is a must.
It happens quite a lot.
A trader makes a trade, the market goes against him, he loses a lot of money and he freaks.
Then there’s usually a spiral of doom.
As the name suggests, doom is not a good place to be in.
Forex trading is totally opposite to standard jobs.
Less is more.
Forex is about controlling your fear and greed on every trade.
Sure these are natural traits of modern humans and you are not a bad person for feeling either one but:
…acting on either one in trading, is financial suicide.
Greed will drive you to take ever increasing risks and gamble.
And fear will limit acting on good decisions.
Remember, Forex trading is risky plus demanding – so you need a strong standing tripod and technical skills.
Like any other profession, consistently successful trading takes time.
Afterall, you can’t expect to start a new job without prior experience and expect to be appointed CEO the next day right?
Before investing large amounts of your savings into the markets, ensure you have enough experience to know when stay in a trade or leave it.
Nobody wants to experience these 5 ugly trading situations, but don’t worry – help is at hand.
We’re here to guide you through all the stages of your trading development and offer support wherever we can.
Cheers and safe trading,
Nenad
Article by Admiral Markets
Source: Top 5 worst trading scenarios
Admiral Markets is a leading online provider, offering trading with Forex and CFDs on stocks, indices, precious metals and energy.