Going from a novice to a professional is a journey all traders have to make. It is up to you if you want to take the long road or the short one!
Taking your first steps into the world of financial trading can bring about feelings of both excitement and apprehension.
The opportunity to make fast money in the markets is possible but the new trader must ensure that they have the necessary knowledge and skills to make it happen!
At this stage a new trader will have a lot of ups and downs along the way as they look to find their way in achieving their goal of making money in the markets.
Many won’t consider the risks they are taking to achieve high returns in a short space of time and their consistency will be impacting by a lack of experience and skills.
These new traders will recognise that to become a consistent “Money Maker” they need a strategy and a plan, and for that to happen they need to increase their trading knowledge.
The first place that many go for answers is Google search.
The “Googler” is in the experimental trading zone, trying out new strategies and systems and looking for magic trading formulas.
A Google search for “Forex Trading Strategies” will give you over 40 million search results. Try “Technical Analysis” and you will find close to 100 million results.
The new “Forex Googler” has a tough time trying to identify the truth from the myths.
After trying countless news systems and every technical indicator they can find the trader eventually learns a few new lessons…
• There are no magic forex trading formulas!
• Nothing and no one can predict the future price of a currency pair with certainty!
• Master, one trading strategy that makes sense, and focus on that alone!
• 80% of the game is managing risk and controlling emotions!
Some reflection happens at this stage resulting in a major change in behavior, as the new trader starts to think a bit deeper about what behaviors and actions will make a real difference to their trading performance. Time to get a little bit philosophical.
The Philosopher has learnt a lot of lessons along the way at this stage and has now identified a better way of viewing, interpreting and trading the forex market.
Conclusions reached at this stage:
• Interpreting and understanding what drives the currency markets such as economic news and politics is a must (It’s not all about the charts!)
• Individual currency analysis comes before analyzing pairs (If I’m trading EURUSD, I want to know what’s happening with the dollar and the euro separately first)
• Having a well-structured trading plan that you stick to is a real edge for success
• Patience and discipline are the core characteristics of all professional traders
Many philosophers can now see the light at the end of the tunnel as they grow and nurture their trading approach, strategy and experience.
In the process, they see a major upturn in their consistency in generating profits.
They are nearly there but not quite yet, the philosopher adapts, improves and moves forward in their trading development getting closer to the professional stage.
The professional has amassed enough knowledge at this stage to be able to read the market with a high degree of clarity and have the confidence and skills to recognize trades that offer the highest probability of success.
• Uses all available tools: technical, fundamental, news and market sentiment
• Adapts their trading approach and strategy to the trading environment
• Trades what they see not what they want to see
• Looks for quality over quantity
• Sticks to their trading plan and journals every trade
• Has mastered their inner emotions
• Never stops learning and adapting
The forex game is about making money. Every trader needs to identify what stage they are at now, and evaluate what they need to do to be a real “Money Maker” in the forex markets.
Let CM Trading help shortcut your forex trading journey by joining our “Make Me a Trader” 6 -part online course. Click the link below to get started.
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HIGH RISK WARNING:
Trading Foreign Exchange (Forex) and Contracts for Differences (CFD’s) is highly speculative, carries a high level of risk and may not be suitable for all investors. You may sustain a loss of some or all of your invested capital, therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading on margin.
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