Do You Know How to Take a Risk?
Unfortunately some people have a wrong impression about trading, and they think we have to guarantee the trading systems we introduce here, and all the trade setups we report have to hit the targets.
First of all, we are not providing any trading advice here on FxKeys. We analyze the markets for the educational purposes only. Whether you want to take any positions based on the analysis you read on FxKeys, or the trading systems you learn here, is your own choice. You trade at your own risk, and you are the one who clicks on the buy or sell button.
Trading is nothing but taking risks. You take a risk when you enter the market, no matter what trading system you follow, or how strong the trade setup is. Even the strongest trade setups can hit the stop loss. That is why stop loss was invented, otherwise there was no point to have something called as stop loss. Even the most experienced and professional traders have to handle losses sometimes.
I decided to talk about this topic today, because I see that some traders start complaining when a position doesn’t move in a way they expect, or goes against the trade setup we report. There is no doubt that these people have started trading with real money before they learn everything about forex trading. Maybe they take too much risks, and so they panic when a position goes against them or hits the stop loss. This is not how it works.
Forex trading is not a stressful job (Trade Forex Stress Free). There is something wrong, if you have stress while trading forex. These are some of the reasons of having stress while trading:
1. You are trading with the money that you can not afford to lose.
We have already talked about this a lot. A few winning positions should not make you think that you have become a professional trader, and you can double all your savings within a month. This will be ended to nothing but loss. Keep in your mind that you should never start trading with a big account. If $10,000 is all the savings you have, never open a $10,000 or even a $5,000 live account. If you ask me, I suggest you not to open a live account if $10,000 is all the money you have. As a forex trader, keep on demo trading to improve your discipline and skills, and gain more experience. Repeat your success month after month, and at the same time save some money through your other jobs until you become able to open a $1000-5000 account. Do not touch your $10,000 savings.
After you opened a $1000-5000 account, start trading with it as if you were trading with a demo account. Do whatever you have been doing with the demo and repeat your success for several consecutive months while you are taking a less than usual risk. You have to pass this stage to build and develop your confidence in live trading, and at the same time grow your account slowly and steadily. Keep on working till you double your money. I don’t know how long does it take for you to do it, but wait until you do it. Then withdraw the initial capital and repeat the same process with the profit you have left in your account. Do not rush to double or triple your money within the shortest time. You will lose your money.
If you start live trading the way I explained above, you will not have any stress while trading and having open positions, because you have already learned how to trade. You pick the strongest setups, and limit and manage your risks. You don’t take too much risks, because you are aware of forex trading risks. You know that you are not supposed to become a millionaire within few months. Therefore, you trade patiently, and without any stress.
2. You think forex is a get-rick-quick scheme.
Most traders think that We have already talked about this a lot. A few winning positions should not make you think that you have become a professional trader, and you can double all your savings within a month. This will be ended to nothing but loss. Keep in your mind that you should never start trading with a big account. If $10,000 is all the savings you have, never open a $10,000 or even a $5,000 live account. If you ask me, I suggest you not to open a live account if $10,000 is all the money you have. As a forex trader, keep on demo trading to improve your discipline and skills, and gain more experience. Repeat your success month after month, and at the same time save some money through your other jobs until you become able to open a $1000-5000 account. Do not touch your $10,000 savings.
After you opened a $1000-5000 account, start trading with it as if you were trading with a demo account. Do whatever you have been doing with the demo and repeat your success for several consecutive months while you are taking a less than usual risk. You have to pass this stage to build and develop your confidence in live trading, and at the same time grow your account slowly and steadily. Keep on working till you double your money. I don’t know how long does it take for you to do it, but wait until you do it. Then withdraw the initial capital and repeat the same process with the profit you have left in your account. Do not rush to double or triple your money within the shortest time. You will lose your money.
If you start live trading the way I explained above, you will not have any stress while trading and having open positions, because you have already learned how to trade. You pick the strongest setups, and limit and manage your risks. You don’t take too much risks, because you are aware of forex trading risks. You know that you are not supposed to become a millionaire within few months. Therefore, you trade patiently, and without any stress.
2. You think forex is a get-rick-quick scheme.
Most traders think that forex trading is a get-rick-quick scheme. Therefore, they get nervous and sad when they see it doesn’t work the way they expected. They want to double their money every month, but they get mad when the positions don’t behave the way they expect.
You can become rich through forex trading, but not the way you think. You have to do it the way I explained above. It is a long journey and only disciplined and patient traders will reach the destination. Forget about the stories you hear and read about the traders who turned a $2,000 account into $2 millions within a year or so. Some of these stories can be true, BUT in order to achieve this, you have to start from the first stage, not that as soon as you learn a few things about forex and chart analysis, you open a live account and try to copy those traders. How are you going to turn a $2,000 account into $2 million, while you have not been able to make a 10% profit on a demo account for a few consecutive months yet? How are you going to do that, when your losses are too big and your gains are too small, because you don’t know how to limit your risks?
You have to start from the first step, if you want to reach the destination. The very first a few steps are too important, because they build the foundation of your trading business. If you don’t take them properly, you will have a hard time to become a profitable trader, and chances are you give up at the middle of the way and lose the chance of making money through forex trading for the rest of your life.
One has to study for over 20 years to become a family doctor and have an annual income of about $140,000 after the tax. If he has a student loan, then only $105,000 will be left for him every year. How do you expect to become a millionaire through forex trading, while you have not spent even a few months on learning and practising, and while you have not passed the basic and fundamental stages yet?
I am not saying that you have to spend 20 years to become a profitable forex trader. You can achieve it in less than a year (depend on the time you can spend on learning and practising), but only if you start from the right place and you follow the right track, otherwise even 20 years will not be enough.
3. You have not learned the basics, and you have not mastered a good, simple and practical trading system yet.
The unknown is scary. You have a lot of fear when you trade forex while you don’t know what it is exactly, and whether it will make money for you, or it will eat your money. If you have started live trading while forex is unknown to you, and you trade just because a friend has told you that it makes money, and he has taught you the basics and has shown you some charts and examples of the trade setups, then you will have a lot of fear when you enter the market. It is like swimming in a sea that you don’t know whether it has any sharks or not. Can you enjoy your swimming? Definitely not.
That is not all about the fear. Someone who doesn’t know what forex trading is all about can make terrible mistakes. He will trade with the money that he cannot afford to lose (item #1 above). He thinks that forex is a get-rich-quick scheme (item #2 above), and… some other mistakes like that.
If what you have read above sounds like you, then please stop trading with your live account. It will never be too late to start again. However, if you lose your money, you will have a hard time to recover, both financially and emotionally. Start trading live when you are 100% ready. Before learning everything that a profitable trader has to know, live trading will be nothing but a bad experience. Don’t think that you are lucky and you can make money by chance. When it comes to trading, only someone who knows how to trade can be lucky enough to end the month with profit. The rest will lose.
Here on FxKeys, we have collected all the information one need to have to become a profitable forex trader. Do yourself and your money a big favour and don’t take any positions before you read this article: Become a Profitable Forex Trader In 5 Easy Steps