The Truth About Trading
You can earn huge amounts of money trading on the forex market, making efforts for only a few minutes a day
This statement is true, BUT this article is not as other articles. In it I intend to tell you the truth. The truth is that in order for you to reach this point, the moment when everything is simple and easy, you need to put tremendous effort. Do not believe the thousands of failed traders who argue that trading is a gambling – it is most definitely not. Trading on the world financial markets is a profession. This is a business like any other. Competition is fierce and only the strong survive. No talent is needed, it takes knowledge and a lot of work. I recommend you read the book “Talent Is Overrated” by Geoff Colvin. From it you can learn a lot about how to become successful not only in Trading but in life in general, following the example of many celebrities with great achievements.
What you have to do is consider the first few years in trading as a “school”. Think about your losses as the tuition fee. You can`t become an engineer or a doctor with the reading of two books and a visit of a few-hour seminar. It is incomprehensible why so many people think they will become profitable traders, when they put even less effort. In trading, as with any sport or profession only the best prosper. Trading on world financial markets is a global business. This means that you are competing for profit with professionals and amateurs from all over the world. Assuming that only 10% are profitable in the long-term, you should be better than the 9 other average traders. The point is that you have to put more effort in, to trade a longer time, to read more books, to spend more time looking at the charts. Do you want success more than others? Are you smarter than the others?
You should know that these 10% who are taking your money, (if you’re one of the losers) were tireless, relentless and devoted thousands of hours of their life, going through hundreds of losing periods, taking thousands of losing positions, trembling in front of the charts, fighting for knowledge and experience through which, one day they will gain a better understanding of what is happening in the markets, so they can be right more often than wrong. Remember that people who engage in trading on the global financial markets have above average intelligence and that does not make your task easier.
To earn money systematically by trading on the markets, you must master not only the technical aspect of trading but also the psychological.
The technical aspects can be mastered with the help of our site financialmarkets.zone or other similar sites. The Internet is full of useful information, the only problem is that it is too much and it is not easy to set apart the valuable information, from the rest. Surely you met many websites that promote various KISS (“Keep it simple, stupid”) methods. They will say “Is it difficult to win? You only need to buy at the right time and sell at the right time, it is not necessary to have a complicated system. “
Simple setups may work occasionally, but you can hardly attain the required level of performance that you need to reach the 10%. If “simple” was really working, there wouldn`t be so many losing traders. The truth is that simplicity is not working. To become a “market wizard” you have to become one with the market, to feel what is happening with every cell of your body, if you achieve it, you can base your position only on gut feel. What actually is the gut feel, it is the subconscious activity of the brain, based on previous experiences. What I’m trying to say is that when you have learned the trading techniques of technical analysis earning money can become a really easy task.
But before that, you have to learn to apply a simple analysis of price action (PA), to know what the market is telling you with each candle even if you do not know the specific name of this candle described in the textbooks (spinning tops, marubozu, dragonfly, hanging man, gravestone, doji , shooting star, tweezers bottom/top, hammer , bullish/bearish engulfing, morning star, evening star, three white soldiers, three black craws and etc);
- Learn to recognize and draw horizontal, then sloping levels and areas of support and resistance;
- Get used to recognize different shapes and formations (H&S, triangles, flags, wedges, pennants, rectangles, diamonds, double and triple bottoms and tops, cups, etc.);
- Know where and how to apply them, improve in this skill, to the extent that you will know how far you can stretch the rules written in the books and be right in your analyzes;
- Know the different indicators and how to apply them;
- Learn when to trade and when not to (which is usually even more difficult);
- Learn to analyze using the charts of all time frames (minute, hourly, daily, weekly, monthly) believe me you need them all
You can add more and more different techniques, such as Elliott waves, VSA, Fibonacci, harmonic figures and others.
When you master all these techniques and knowledge, begins the real “game”. To become a true “market wizard” and to have the chance on your side you will have to apply these techniques to any position you are opening and you will still have to put stops because it is very unlikely that you will be right in more than 70-80% of the cases. Do not be afraid, many people before you have succeeded in this endeavor and if you desire it and if you make the necessary efforts you too can succeed. As I already wrote this profession is like any other profession, you just have to learn the craft.(I recommend you to read one or all of the series of books by Jack D. Schwager “Market Wizards” and to learn how some of the 10% have accomplished this)
Trading on the global financial markets is a mental game.
Your decisions may, and will be affected by your psychological state. This is the reason most traders, who are successful with their demo accounts later fail. The technical side of trading, albeit very complicated can be learn, if you invest enough effort and time. The bad news is that you may never reach the level of psychological stability, you need to be among the 10% of traders who win constantly.
Believe me, what you are dealing with can even be dangerous – not only for your financial, but also physical health. Fear and greed move the markets and ultimately you will be consumed by them. Some of you may be thinking to themselves, while reading these lines: “This does not imply to me. I`m not greedy, nor fearful”. Believe me – you are. There will be times when you can`t recognize yourself. You will make stupid mistakes, which you have forbidden yourself from doing tens of times. You will end up asking yourself: “Why!?! What the hell am I doing!?!” Trading is like a distorting mirror, which amplifies your worst traits and multiplies them tenfold.
You will meet despair after a losing trade and euphoria after a winning one. You should know, that you will be riding this emotional roller coaster for a very long time.
After you spend several months trading (if you last that long), you will know if trading is suitable for you. Don`t expect to be winners straight away. It would be a success if you have the same amount you started with in your account, after six months. Most rookie traders blow out their first accounts completely. Then comes the moment of truth. Some say “no one can make money, trading”. That way they are looking for an excuse, to leave the financial markets which have cost them so much pain and stress. There is no problem in being one of them – just return to your ordinary life. If you are a different type of person, the one who never gives up, start reading and learning and you will know if this is your destiny. You will say to yourself: “Failure is not an option!” This is the first step every market wizard has taken. George Soros, Warren Buffet, Paul Tudor Jones, Linda Raschke, Jesse Livermore, Larry Williams, Al Brooks, Nicolas Darvas and many others. They all started this way. Some of them have even gone bankrupt, multiple times. They had lost fortunes, just to win them back again from the market, with a little interest, of course. What is the common thing among them? They never gave up.
If you have made the decision to succeed by putting in the necessary effort, it`s time to rethink your point of view on trading. Now is the time you have to realize the truth about trading – it is a long-term game. You have to become a master of risk. You have to build psychological strength through practice. You have to take winners and losers unemotionally. You have to fight day by day, trying to get more winning trades, than losing ones. If you don`t realize that the game is long-term, you will be crushed by your psychology. You will take profits too early on your winning trades and hold losers too long, hoping they will turn around. Remember that winning traders don`t pray and hope and they never risk their entire careers in one trade (Every single trade involves risk. No one can be certain what is going to happen in the future).
Professional traders are people like you. They also deal with these problems daily. You can find an illustration if you read Nicolas Darvas` book “How I Made 2000000 in the Stock Market“. He nagged to overcome the difficulties. You can also familiarize yourself with the story of Jesse Livermore, who makes an unheard of fortune in the early 20-th century and then goes broke because of one bad position, gone out of control. He breaks all his rules in that trade. Years later he makes a fortune again, becoming one of the richest men in America. Despite his unique talent he never manages to handle the psychological aspect of trading. He then goes broke again and commits suicide.
I will go back to the beginning of the article. If you are asked: “Do you want to earn huge amounts of money trading the financial markets, making efforts for only a few minutes a day?”, most of you probably will say they do. Reality is different. We are all taught we need to work, to get a reward. This is why many people sabotage themselves unconsciously. They don`t realize that once they get to a certain level of experience, it is enough to take a look at the market once a day. If you trade long-term, you only need patience, however unnatural that may seem to you. In trading, unlike other businesses, it`s often best to do nothing. Waiting for a good opportunity is better, because every bad decision leads to a loss of money. You can spend the time in which you are not in front of the charts for learning new techniques or improving your psychological condition. Live a balanced life, have fun and have different hobbies. This is the only way you will be able to cope with the stress and make the best decisions.
Don`t forget that the real trader has never achieved his goal. He knows there always is something more to learn. He doesn`t stop working towards improving his skills. I recommend you watch this interview, taken from Don Miller: link. . He says it took him “close to a decade” to become a consistent winner, but he still doesn`t think he has “figured out” the market.
Trade from the viewpoint of the trader you want to be, not the one you are now.
If you think and behave like a professional trader, you will become one without noticing.