From birth to babble to learn to speak, from hungry to be fed to stand tall, everyone is born, there is a growth process, from baby to juvenile, youth, middle age, old age, these are the necessary stage of everyone’s growth.
Similarly, for forex traders, when they enter the market, like newborn babies, there are stages of growth.
As more and more traders enter the forex market, traders should be aware of their growth stage so that they can better handle any challenges they may face in trading.
In yesterday’s “What are the stages a Forex Trader must go through, Do you know?
We talked about the dilemma that almost every trader faces.
A setback at the start of the trade?
It’s really quite common.
The bigger difficulty is that after you have experienced great success, you encounter failure again, perhaps, you will slowly begin to change.
Today we continue our story of the second half of a trader’s success and hope to continue to enlighten you.
Step 5: Why Trading is just like life. There is a classic saying that can be applied to traders: Why do we understand so much and still fail in life?
In this age, we are lucky because there is so much great wisdom for us to read, but most of us, selectively ignore it.
Each of us must go through the same struggles, make mistakes, and live the “great story” again and again.
In the wake of the digital currency losses, I reflected on all the things I had done wrong, and it hit me like a bullet.
Are you like me?
Although aware of the attack, not sure how to make a decision.
I knew the market had turned and it was time to cut and leave, but I couldn’t pull the trigger.
Deep down, I just couldn’t accept failure.
I used to think I was a good trader, cautious and decisive.
But now, I’m facing a new reality.
I’m not as good as I thought I was.
As Paul Tudor Jones put it, “losers are the ones who add to their losses to spread their costs.”
Traders can’t correct errors in time unless they do it often enough, and the most important lesson I’ve learned is from the digital currency trade.
“Cut your losses and fly your profits.”
Step 6: Money Management The wisdom of our predecessors can actually be summed up in one sentence: money management.
Loss reduction is one of the key principles that everyone must learn.
You know you’re going to be wrong a lot of the time.
That means you have to protect your principal at all costs.
‘I’m always thinking about whether I’m going to lose money and how much I can afford to lose, rather than how much I’m going to make,’ says Paul Tudor Jones.
Don’t focus on making money. Focus on protecting what you have and what you earn.”
Money management boils down to a few key principles: 1) good position control to minimize risk and 2) Firm stop losses.
3) Don’t use too much leverage 4) Don’t add to your position when you start losing money.
5) When you experience a serious streak of losses, step out and take a break.
All of these principles should work together to protect your money.
I learned this the hard way again just a few weeks ago, when I took my position to the floor and slowly found a rhythm after a string of losses.
In retrospect, the mistake was easy to see.
If you experience a loss after a heavy position, the next trade is bound to be unable to continue the heavy position, perhaps you should use 30 or 50 percent of the previous trade, to yourself as a punishment.
Step 7: Don’t pay too much attention. It may seem strange for people to say I don’t follow other traders or the news.
I may occasionally glance at the analysis of a trader I really respect to see if it matches my market feelings, but this is very rare.
I may also connect with a trader I know well and who has a long-term view.
But in the end, you have to follow your own opinion.
You have to become so good that the only thing you trust most is your own analysis.
“Always walk by the shore.” If you have a burning desire to trade and win, then you will find a way to do it without following anyone else.
I highly recommend that every trader turn off their news feed for a month.
Unfollow everyone on social media.
Don’t read any financial apps.
I promise you, you won‘t miss anything.
If something really big happens (like a pneumonia outbreak), you’re bound to hear about it because everyone around you is talking about it.
It’s not worth listening to if it’s not important enough to appeal to everyone.
Also, psychologically, there is less to focus on (and more to focus on) the trade itself.
Your anxiety and fear will decrease.
Ed Seykota, one of the best trend traders, once said, “Eventually, I became more confident in this trend trade, and after ignoring market news, I became more comfortable with this approach.”
Most ordinary traders like to focus on the news. They want to know why the market is going up or down.
But they can’t deal with the hundreds of news items every day.
In fact, the more you read the news, the more you realize that the breaking events are normal events.
The plague was a daily occurrence, and people were shot every few seconds.
News, in a sense, is poison.
Bite your arm, suck the venom, and spit it out.
Step 8: Develop your own trading style If you get this far, you have the final key to successful trading.
Develop your own system.
Each trading master presents the theoretical knowledge he has learned differently through his own experience.
If he just copied what the teacher taught him and simply passed it on to you, what’s the point?
Take kung fu for example. Ancient kung fu masters not only learned from others, but also reflected on it.
They study nature and themselves.
Observe the movements of animals such as snakes and birds, and try to develop their own kung fu by incorporating human structures.
The same goes for trading, and eventually, you will need to develop a trading style that perfectly suits your own personality, your own strengths and weaknesses.
If you just blindly follow others, you won’t be able to make decisions when the going gets tough.
As Ed Seykota says, “Everyone can get what they want out of the market.”
Why do some traders make steady profits?
They are passionate about the market and want to win.
To do this, they become the best traders they can be by reflecting deeply and transcending their own artificial limitations.
They go their own way, a lonely way, but also full of joy.
The path of your own control.
They decide their own lives and transactions.
When they win, they don’t get cocky.
When they lose money, they have no one to blame but themselves.
And they don’t need any external validation, praise or flattery.
All the praise and validation that legendary traders will need will show up in the only place that matters — their accounts and wallets.
