Most beginner traders out there are sure that to be successful in trading financial markets, it's sufficient to know how to read indicators, support/resistance levels, trading volume, to apply technical analysis, and so much more. The experts representing FxPro, the world's leading forex broker, think that this is something bigger. In particular, they are convinced that profitable trading results from proper education, with a comprehensive knowledge base, including the knowledge about the financial markets themselves. Masterforex-V's editorial staff decided to dive deeper into the matter and figure out what actually stands behind those words.
FxPro: 3 Things You Should Know Before Starting Your Trading Career
1. Financial markets are believed to be a catalyst for the human nature. Basically, people behave the same way, whether this is market trading or pretty much any other human activity out there. With that being said, before getting started with forex trading, take your time and think how good you are familiar with yourself. On the one hand, delusions about yourself can cost you a penny when it comes to financial markets. On there other hand, trading gradually allows people to develop decent psychological skills, which positively influence other aspects of life.
Are you a compulsive gambler? Are you greedy or generous? To what extent? For instance, you can donate to the needy but would you actually agree to get a salary cut in favor of your co-worker just because they need more money and need it badly?
Basically, people tend to keep in mind the biggest losses and wins. Each trade made by you can actually affect your future memories. This is very important. Most traders break even or lose money over the long term just because they violate the simplest rules of wise money-management by falling prey to sudden emotional outbursts.
FxPro has come up with an online wallet called FxPro Wallet. It helps traders develop wise money-management habits. The lion's share of the deposit is stored in the wallet while the the rest of the money participating in the trading are transfered to/from the trading account when needed. As a result, the trader doesn't risk all of their capital by making bad emotion-driven trading decisions.
Simple and easy? Probably, it really is! Yet, it shouldn't be underestimated by any means!
2. Financial markets follow the principles of real life.
If you are not afraid to live, to go outside and talk to people, there's no need to be afraid of financial markets either. Fear is mostly driven by uncertainty and inability to control the situation. When it comes to financial markets, traders may have a hard time understanding what drives the market and where it's going to move the next minute. That's why it's hard for them to choose between buying and selling an asset. However, there are many similarly uncertain things surrounding us in everyday life. Simply put, you don't know for sure what may happen on your way to a local store.
However, despite all of the potential threats, you get dressed, take a certain amount of money and go outside. Why? Everything is plain and simple. You have come up with an efficient strategy, an algorithm you stick to at all times. The risk are still there by you reduce them to the minimum because you have a plan and you follow it. If you were to go outside and start moving in an unknown direction, chances are you may get to a dangerous place.
The bottom line is that you need a plan, a decent strategy to follow, both in life and in financial markets. The strategy should match your state of mind. You should stick to the strategy the way you stick to those safety rules in daily life.
3. Financial markets teach people to be self-reliant, responsible for their own words, decisions, and actions, and to be the masters of their own lives.
Each forex trading session can be compared to a psycho-therapy session: you define your week and strong spots, learn to focus and control your thoughts and align them with tour actions.
It's common knowledge that decent family guys make decent traders. They are used to keeping their word, appreciating their loved ones, respecting their values and life principles. They don't get upset with trivial things and bad luck as they understand that it's impossible to foresee each and every thing out there. They follow their strategy and make timely decisions. Spontaneous actions may be good anywhere but in financial markets. Basically, financial markets are a place where you'd better have plan A and plan B, as well. By the way, this is holds true for many other aspects of life.
FxPro experts are convinced that we ourselves are responsible for our own success in trading and in life.
