PSYCHOLOGY, DON’T LET YOUR EMOTIONS GET THE BETTER OF YOU
We honestly cannot stress this enough, DISCIPLINE IS KEY! Most traders fail in the first few weeks/months of trading because they lack in discipline. We strongly advise that you have a clear strategy before you place any trade. This includes potential wins and potential shortfalls. Always place your SL and TP and never place a trade on a whim.
Don’t over commit to trades and know when to cut your losses
Most people have the misconception that all traders are machines that live on nothing but red bull and 2 hours sleep a day and that they have no contact with their emotions. This is nonsense. All people are emotional, and knowing this from day 1 will help you trade smart and mitigate your losses. People tend to analyse the market and hope that the trade will move in a favourable direction. Like when you buy a ticket for the lottery, you always think you will win! Well what would you do if you could get some of your money back once you realised the first 2 numbers in the draw weren’t yours? You would get it back, right? So why wouldn’t you close your trade early if you could clearly see it wasn’t going your way. Changing factors may have turned against your original analysis, cut your losses early before it gets worse!
We answer the same question with the same simple answer… EVERY TIME!
HOW MUCH ARE YOU WILLING TO LOSE?
A common mistake made by new traders is over-leveraging an account. Just because one lot (250,000 units) of currency only requires $2500 as a minimum margin deposit, it does not mean that a trader with $12500 in his account should be able to trade 5 lots. One lot is $250,000 and should be treated as a $250,000 investment and not the $2500 put up as margin. Most traders analyse the charts correctly and place sensible trades, yet they tend to over leverage themselves. As a consequence of this, they are often forced to exit a position at the wrong time. A good rule of thumb is to trade with 1:10 leverage or never use more than 10% of your account at any given time.
We honestly cannot stress this enough, DISCIPLINE IS KEY! Most traders fail in the first few weeks/months of trading because they lack in discipline. We strongly advise that you have a clear strategy before you place any trade. This includes potential wins and potential shortfalls. Always place your SL and TP and never place a trade on a whim.
Don’t over commit to trades and know when to cut your losses
Most people have the misconception that all traders are machines that live on nothing but red bull and 2 hours sleep a day and that they have no contact with their emotions. This is nonsense. All people are emotional, and knowing this from day 1 will help you trade smart and mitigate your losses. People tend to analyse the market and hope that the trade will move in a favourable direction. Like when you buy a ticket for the lottery, you always think you will win! Well what would you do if you could get some of your money back once you realised the first 2 numbers in the draw weren’t yours? You would get it back, right? So why wouldn’t you close your trade early if you could clearly see it wasn’t going your way. Changing factors may have turned against your original analysis, cut your losses early before it gets worse!
Don't trade more than you can afford
We get asked maybe 20 times a day. How much should I trade?We answer the same question with the same simple answer… EVERY TIME!
HOW MUCH ARE YOU WILLING TO LOSE?
A common mistake made by new traders is over-leveraging an account. Just because one lot (250,000 units) of currency only requires $2500 as a minimum margin deposit, it does not mean that a trader with $12500 in his account should be able to trade 5 lots. One lot is $250,000 and should be treated as a $250,000 investment and not the $2500 put up as margin. Most traders analyse the charts correctly and place sensible trades, yet they tend to over leverage themselves. As a consequence of this, they are often forced to exit a position at the wrong time. A good rule of thumb is to trade with 1:10 leverage or never use more than 10% of your account at any given time.
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