In 10 years of Forex trading, these are the most important lessons learned
For nearly two decades now, I have been learning about the Forex markets and trading them. When I see something like this written, it makes me realize two things:
As I get older, my desire to give back and help young traders and those new to the game increases. Forex trading is a tricky business, and if you don’t take the time to learn from people who have been around the block a few times.
While composing this, I sat in a coffee shop and pondered the most important lessons I had learned in my 10 years of trading the Forex markets.
Here are the top ten things I learned in my Forex trading journey, in no particular order and they are all equally important…
Trade with a protective mindset while dealing in the Forex market
Warren Buffett’s famous quote about losing money is something like this:
The first rule is to never lose money in Forex trading.
Rule #2: Don’t forget the first rule.
Novice Forex traders often approach the market with the wrong perspective. They are just trying to make money as fast as possible, but really, they should try to protect their money as much as possible.
It is impossible to be in both states of mind at the same time in the Forex market
You have to choose between the two, and if you don’t choose to protect your money in Forex trading as much as possible, you are likely to lose it.
What is the most effective crime? This is a strong defense for Forex trading
This is something you hear a lot in sports, but it also applies to Forex trading: an efficient defense is the best attack. this is the reason:
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Being defensive in your approach to Forex trading is the only way to achieve consistent long-term trading success. That is, you only trade when market conditions are favorable and all criteria in your Forex trading plan are met.
The purpose of Forex trading is not only to make money from trades, but also to avoid losing money. Each of these deliberative activities requires a high level of mental toughness.
It is not uncommon for a new Forex trader to get rich and do some solid Forex trading, or even do a good job some time sticking to a Forex trading plan rather than being a lucky Forex trader.
Many, if not all, Forex traders, after performing well for a while, blow it up. Forex traders become self-confident, arrogant or arrogant, as the case may be. The idea is that winning is satisfying, and it often goes into a trader’s head.
When the feeling of winning is flooding your brain with the neurotransmitters that make you feel happy, all your good work, defensive, slow and deliberate to hit those winners tends to go out the window.
The ability to keep your Forex trading funds safe is critical to your success
Working to protect your trading capital in the market is basically how you act defensively in the Forex market.
In Forex trading, you want to save your risk money for easy trading setups, those high-probability signals of price action that are so obvious that they practically call you!
You do not want to waste your money on the signals on the fence in the Forex market that you are looking for on the Internet for confirmation. Most of the time, the best Forex signals are very straightforward, and that’s something I’ve learned over the years.
As long as you handle your risk in the Forex market correctly, you will never be angry with yourself, or at least you should not be angry, for taking a strong and aggregated Forex trading signal that fails. However, if you take a cue you’re not sure of, one that looked like a cue but wasn’t, and you lose, you’ll kick yourself out.
As a Forex trader, my goal is to never feel compelled to kick myself after a trade, whether I win, lose or tie in a Forex trade.
Watching Forex charts and tracking trades will really hurt your results
In life, we often find that the more something is messed about, the worse it becomes. Is it better to keep bringing up the fight and re-conflict it with your significant other than to just let it go and move on? Excessive interference in Forex trading is not a negative thing, and when it comes to our trading in the Forex market, it is usually very egregious.
