5 things I wish I had known before I started trading
Everyone makes mistakes.
If you want to win you got to try! The process can be painful.
When I started trading I was lead by the believe that money (BIG Money) comes easily for those who “know how to trade” the financial markets. Commercials, Internet Gurus and even my broker contributed to that belief..
Boy was I wrong!
Everyone makes mistakes.
If you want to win you got to try! The key is to learn from your mistakes as you move forward.. and also from others.
Here’s my story and the lessons I’ve learned…
Like most traders I know, me too had a rough start to my trading career.
From over leverage to almost destroying my marriage by staying glued to the screens for days and weeks, I’ve done it all.
If I could have done things differently and start all over again, there are five important insights I now know, that I would have definitely implemented from the first day of trading.
Technical Analysis isn’t enough!
Most of us approached trading following some courses/lessons learned about technical analysis (usually its the basic stuff).
What we do not know when we start, is that understanding technical analysis is probably the easiest task in a trader journey towards success.
Anyone can draw some lines on a chart, or read signals from basic indicators like RSI and Stochastic (the most used indicators for newbies), but unless you really understand price movement, timing, time frames analysis and market’s sentiment, you are doomed to focus on the wrong lines and the wrong trade signals.
It doesn’t end with that — What about trade execution? Setting realistic targets and keeping proper Risk/Reward? You can be the best analyst in the world, but if you do not know how to manage trades, you’ll lose money.
When I started, I knew how to spot the right turning point. I was mostly right.. yet I lost money. Why? I used tight stop loss order, I was constantly thrown out of the trades by False Breaks and Spikes and when when the price did turn in my favor, I took early profits to cover losses I had before.
Understanding the way price moves takes time and a lot of practice. Either you take the time and put the effort to learn it by yourself, or you join services like The Elite Zone, and learn from pros, the most important thing is to understand that technical analysis alone isn’t enough.
Over Leverage and Over trading — Grinding is better than a hitting home run
Why do we start trading? To make money..
Why do we need money? Cause we don’t (or can’t) have enough of it
The need for money drives us into trading but.. Greed is what can destroy your trading career in its early stages.
Most traders are fascinated by the false publicity of fast and easy money that comes by high leverage trading, but the truth is that the same high leverage is what causing 90% of the traders to blow up their accounts over and over again.
I know that at first, when I felt like I’m on a roll or when I sensed some major turn in the markets, I used to go “All In” and use the highest leverage I could get in order to maximize profits and hit the Jackpot…
But.. as you well know, the markets doesn’t always comply with your desires and it isn’t that easy to be spot on a huge market turn..
The result in most cases is that you end up with a situation that every tick/pip against you cost you a lot of money! More than you can take..
Fear paralyzes you and you either exit the trade early (just to watch the market move in your direction without you) or blindly hoping that it’ll pass, letting the price eat your account till you get a margin call.
Just like in Baseball, hitting a Home Run is a rare occasion, but you can still win the game by scoring one point at a time…..
Grinding is much better than trying to hit the home run and if you have statistical edge, you’ll be able to earn more than you lose and therefore become profitable.
