Forex Trading for Begginers
If you were to conduct a quick Internet search for ‘’trader lifestyle’ or any such related enquiry, it is likely you shall come across images of premium cars, private jets, and seaside penthouses. You would be hard-pressed to find detailed information about individuals that leave trading, and the impact it had—and perhaps continues to have—on their lives.
As a beginner to the world of forex trading, it is important to understand some of the key reasons why many beginner traders subsequently quit trading; for it is hoped that such awareness would provide one with ample time to prepare means of avoiding and or minimizing the impact of similar experiences.
There are a host of reasons that could be explored in attempt to better understand why many forex traders quit; but below, we focus on some of those we consider to be most prominent.
From Small Initial Capital Deposits to Blown Accounts
Forex attracts many aspiring traders from all major continents of the world; and new aspirants are usually required to create real trading accounts denominated in one of the world’s major trade currencies (such as US Dollar, European Euro, or British Pound). To achieve this, many aspiring traders work and save for months or even years, just to accumulate enough of their local currencies, to be exchanged for a very modest amount denominated in one of the aforementioned currencies.
For some people, an equally considerable challenge is the fact that the money deposited into their new trading accounts represents amounts they simply cannot afford to lose. And as such, one of two scenarios are likely to occur. It is either the new trader gets locked into inactivity by fear of losing his or her initial capital deposits; or, the new trader adopts an amateur gambler’s mindset, and seeks to multiply the account balance is very little time. In either scenario, it is either the account balance remains small and unencouraging for a prolonged period of time, leading to permanent disinterest in trading activities. Or, all of the initial starting capital is lost, with little possibility for timely replacement.
Undesirable Experiences Leading to Sense of Betrayal
By undesirable experiences we’re referring to losing trades. Loses are generally unwanted by many traders: especially beginner traders. And once the average beginner trader experiences a series of loses in a row, one’s confidence level takes a hit. But there is an important lesson to keep in mind.
As it relates to beginner traders and loses, there are two general categories of traders.
- There are beginner traders who experience a period of loses followed by a very brief period of wins, then a period of loses, followed by a very brief period of wins of wins, and so on. Until, eventually, they either become consistently profitable, or they step away from trading. But the point to be noted about this group of new traders is that, those brief period of wins (despite not being consistently profitable) tend to serve as ongoing encouragement for the trader.
- Then there are beginner traders who never truly experience periods of winning. This is the group within which beginner traders can spend years blowing through a series of small accounts: after trying a host of trading strategies and tactics. Within this group, the rate of traders that subsequently quit trading altogether tends to be higher than those in the other group. But note this, some of those who make it out of this group, as consistently profitable traders, go on to become some of the most skilled traders in the world.
As a new trader, it is important to keep in mind that you will belong to one of the two groups described above, by default. And, you do not have the luxury of choosing either of the two.
For a lot of people who become attracted to the world of fore trading, time constraint remains a notable impediment. For instance, there are those who engage in trading part-time whilst maintaining full-time employment. This is often necessitated by limited trading skills and account funding, and the reality of ongoing personal expenses.
Then there are those who face specific time constraints, resultant from being students, parents, or carers for the elderly or infirmed.
It is important to note that trading is a time-demanding endeavour: more so for beginner traders who are still at the infancy stages of learning and practicing. One must be able and willing to dedicate, at least, a few hours a week towards learning and development
Dissuasion from Family or Friends
Trading is an activity and endeavour that many unfamiliar individuals equate with gambling (including some new traders). For a beginner trader, being surrounded by family and or a social circle that actively and verbally seeks to discourage from continuing with forex trading can become detrimental to one’s psychological stability. When such an unfortunate experience is coupled with time constraints or a prolonged state of undesirable experiences (as discussed previously), many beginners simply walk away from trading.
Simply Not Suited to The Game
There are individuals whose personalities, believes, and lifestyles are simply incompatible with trading. The markets (its characteristics, and many of its publicly celebrated and promoted teachings, indicators, and other tools) are, for the most part, designed for you to lose. With that in mind, those who enter the world of forex trading (or of any other market) with no true intention of dedicating time (likely many years) and effort towards understanding how the markets work in general, and for them more specifically, are better spending their time on other interests.
Trading is a game, but it isn’t your game; take it extremely seriously, or be the latest prize for the real players. Your job is to treat your participation in forex (or any other market) as a business. Always check yourself before you step up to any transaction. Always seek to minimize distractions and potential hindrances towards your pursuit of trading excellence. Always be willing and actively seeking of new learning opportunities. And when you make mistakes, takes notes (think journaling), and seek to learn from them.