There are many stories of success in trading, as well as many failures. That’s what trading has in common with most businesses. But, admitting that you may fail, are you ready to spend your time learning CFD trading commodities, open and closed positions, margin calls and support calls, and stuff? The shortest answer is: it depends on how you spend it. Even a loss won’t be a loss if you gain something from it; that’s the attitude you need.
Time to Invest (Spoiler: a Lot of Time)
It is no secret that most traders rush in without proper preparation. They are either too much encouraged by their success on the demo platform or just take it too easily. It results in discouraging stats. Some brokers are fair enough to warn the newcomers that about 80% of traders on their platforms (we guess, a little more) end up losing all the money they have invested.
To avoid this sad final, one must do one of these things:
- Take trading as a science or an art. Any art (as well as any science) requires a solid bit of learning. You cannot directly observe successful traders doing their job, but you can learn from the basics. Terms, the most common situations, demo platform possibilities, books, and articles by pros with a good reputation (google them to check).
- Take trading as pure gambling. This approach will rather lead to losing your money. But if you’re in it for kicks, you will get enough of them. You don’t have to take the game too seriously.
Despite being opposite, these two approaches have a lot in common. They both assume you’re fully invested in terms of your time and attention – you enjoy the process, regardless of whether it’s a business or a game. Another common thing is to invest just the amount you’re not afraid to lose – to spend on entertainment or to lose during learning. And, of course, an ability to stop not to keep losing, no matter if it’s a calculated or a visceral decision. Anyway, you will have a good time, if you don’t feel entitled to win and earn.
Majorities and Exceptions
While four out of five traders fail, there is a question arising: where did they go wrong? There are certain mistakes that many losers share, and many of them are rather a matter of attitude than a miscalculation.
- Jumping in without a plan (or a strategy). Well, no one prompts you to have one. But take your demo time to select which currency pairs or other commodities are the easiest for you to predict. Learn which positions are the best for your lifestyle, especially if it’s nocturnal or chaotic. There are typical strategies one should learn before entering – maybe there is one that suits your life philosophy and manner.
- Not doing research (doesn’t apply if you’re in it to gamble). The information is provided for free (except for paid signals, but it’s the next level). AS a complete beginner, one needs to absorb as much knowledge as possible.
- Relying on inside information too much. The big news can always be seen on TV, in newspapers, on web portals, and even on social media. Any big event impacts society and thus the currencies that circulate in it. If, for example, a calamity hits the European economy but spares the American, no wonder euro will go down, USD being the base currency (know what it means?) It can impact literally any currency in the world. The lower the spreads (again, what’s that?), the more importance should be given even to minor impacts. So, watch the news and grow into an analytic!
- Hurrying to catch a quick profit. If you see your assets on the rise, you may feel tempted to jump out with a small catch. But if you had waited a bit more, your profit would have been much higher. Imagine a guy who cold his Bitcoins when the rate was $50? Don’t cosplay him.
- Holding on to old hopes. We have already mentioned that one of the hardest arts to master is to know when to quit. Otherwise, you may go deeper and deeper into losses, expecting the revitalization in vain. Some of the dead don’t rise.
Avoiding these mistakes takes more than just being aware, of course. It takes some qualities that you may already have or work hard to develop. And here we proceed to another sort of profits.
Side Effects and Benefits
If you want to ride the charts, you need to learn (no tautology). It’s hard to name a domain where it’s not demanded. And if you are not a student anymore, being a person of far-from-school age, your brain will benefit from this practice.
Another thing you can develop in trading is intuition. When you feel visceral that it’s time to open or close positions, and the intuition tells you which positions to look at, this is mostly worth your attention. This irrational way of knowledge is hard to overrate, though it’s not always and fully right.
Finally, you may need to overcome your fears of risks, of trying something new, of losing money, of making plans – whatever psychological issues that stand in your way. Here is the moment to work it out: therapy may be recommended, but a prayer or even a sheet of paper with two columns may do the work. Even if you give up trading soon after, these achievements will remain.
The time is up, and the brief conclusion is: yes, trading is worth its time if you are ready to spend it wisely, take losses as lessons, and think before you bid. But it takes much longer to master the art of trading if you want to be in it seriously. No quick victory is granted.
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