There are some things you need to know before you embark on your trading journey, otherwise, you might not succeed in your trading adventure and we don’t want that to happen, do we? This Forex education guide will help you track down the most costly mistakes Forex traders make.
First of all, make sure you don’t have a trading system. Having a trading system can increase your chances of success. If you have a system, you will have an objective way to enter and exit the market. When traders create their trading system, they think objectively as there is currently no position to take. If there is no position to take, there is no money at risk, if there is no money at risk, we think objectively and we are open to every possibility so we can find low-risk trading opportunities. So make sure you don’t have a system and you don’t trade based on a random approach.
If you have already created your system, don’t follow it, be undisciplined. If you follow your system, you are likely to make profits from the Forex market based on the trading opportunities you find. If you want to fail in your trading, make sure you are undisciplined.
Do not get an education. Most successful traders are very well educated in the market they trade (stocks, Forex, futures, etc.). If you get educated, you can gain the knowledge and experience you need to master the Forex market. Don’t read about the Forex market, don’t enroll in Forex training programs, and don’t even look at historical charts.
Do not use any money management techniques. The purpose of money management is to avoid the risk of getting ruined, but it also helps you increase your profits, allowing them to grow geometrically. For example, without using any money management techniques, you are likely to empty your trading account by losing 10 trades in a row. On the other hand, you can avoid this by practicing simple money management techniques. So make sure, if you want to fail, don’t even think about money management.
Forget about psychological problems. You need to make every trade to win. Successful traders know that they don’t need to win every trade to profit from the market. This is a feature that is difficult to understand and hard to implement. Why? Because we are taught since childhood that any figure below 70% is a bad figure. In the forex trading environment, this is not true.
Don’t even think about using a Risk-to-reward (RR) ratio greater than 1-1. If you use an RR ratio of 1-2 (willing to earn twice the amount risked on a trade), you only need a system of around 50% to make money. If you use an RR ratio of 1-3 (willing to make three times the amount risked on a trade), you will need a system that is around 40% of the time to make money. So make sure you use an RR ratio below 1-1.
By implementing every point outlined in this Forex training guide, you will almost guarantee your failure in your Forex trading journey. If you do the opposite, you will have the ability to achieve what every trader is looking for: consistent profitable results.