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Living To Trade Another Day
By : Peter Bain and the Forexmentor team
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Mastering the markets takes time, and it is in your best interest to survive to trade another day. Many novice and seasoned traders blew their first trading account. It's almost like you have to, but hopefully with a small amount of capital that you can afford to lose. Survival is the key when trading the forex market and every trader must face his or her long-term prospects. The difference between winning traders and those who end up leaving this profession altogether has to do with how they approach this eventuality. The winning trader is aware and prudent when it comes to long-term goals. The trader who blows out, in contrast, is in a state of denial, afraid to assess his or her current financial situation and take precautions to survive.
The winning trader is aware in that he or she admits that trading is risky, and that profits are not assured. When a trader is afraid to face the odds of losing, unexpressed fear of possibly blowing out bites at him or her. These unexpressed feelings of impending doom can frustrate your efforts at the worst moment. When fear lurks in the back of your mind, you may act impatiently and impulsively. You may tend to think, "I'm tired of looking for profitable setups. I can't wait for the ideal market conditions any longer. I'm just going to execute a few trades and hope for the best." Taking such attitude toward trading doesn't work in the long run. If you want to master the markets, you must prudently plan ahead. What kind of plans do you make? Do you acknowledge how much you win and lose or do you dread facing how well you are doing and feed your account each month? It's all right to lose and it is all right to feed your account, but it is vital that you are fully aware of your actions.
The reality of trading is - it takes money to make money. It is necessary to make sure that you are well capitalized. In addition to carefully accounting for how much money you have to trade, it is necessary to always look at your risk-to-reward ratio before executing a trade. Make sure that you have a reasonable chance of making a profit. Some trades may be too risky for you to take. They may be sound and have a high probability of success, but unless you have adequate capital, they may not be right for you. And if you execute them, you may not survive the worst case scenario. It may be better to find a trade that you can afford to take based on your available capital, rather than risk money you can't afford to lose. By looking at your financial situation realistically, you can take steps (such as standing aside or getting a better job to build up adequate capital) to make sure you survive the learning curve and master the markets.
About the author:
Peter Bain is the Internet's #1 Forex coach and mentor. Peter learned trading in the early days of his career from some of the top traders in trading houses. Over the years, he has developed his instincts for a simple yet powerful trading system based on his Pivot Program. His system is the same system used by many trading houses today. For more information and free forex currency course, please visit: forexmentor.com" target=_blank>http://www.forexmentor.com
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