If you’re in this business for a dose of excitement, we can say with a high probability that you will eventually lose your entire account!
For traders just beginning their journey, they may find the above statement a little off-putting, or even confusing. Is trading not supposed to be one the most exciting activities in the world? A place full of thudding heart beats, waving hands and non-stop thrills? Definitely not! In fact, if you’re looking for this we would strongly advise packing your bag and heading to Las Vegas with your account fund. At least you’d be surrounded by beautiful women and receive complimentary drinks whilst losing money!
Let’s just start by saying that trading is one of the most difficult challenges anyone can take up. You will learn countless things about yourself during the journey. Do you think that you’re a patient person, are you disciplined, can you work well under stress? Whether you like it or not, the market will, within a short space of time, truthfully answer these questions for you, and this is something you’ll need to learn to embrace.
If you’re trading as a professional then, in our humble opinion, it will almost always be boring. There is a point in many retail traders’ careers where they learn to feel comfortable with this boredom. So why exactly should trading be a boring endeavour? Well, compared to traders who look to board the trading roller coaster each day, tracking every single pip, a consistently successful trader on the other hand knows, more often than not, what to expect each and every trading day.
Trading is not a hobby. It’s not a game. It’s a SERIOUS business. If you are attempting to trade the markets without a detailed and tested plan of action, and a well-thought out money-management strategy, you will likely end up either losing your account or throwing in the towel. If you trade as a professional – take trades according to your plan and rigorously stick to the money-management rules you’ve set out, you’ll soon see consistent results.
Trading is, if you think about it from a logical standpoint, relatively straightforward. You can either buy or sell. So why do so many fail at reaching consistency then? Well, good trading requires a lot of waiting around. Human beings, especially when money is involved, are not usually the most patient! So, learn to work on your patience!
We imagine that the majority of traders reading this article trade relatively small accounts ranging from $1000-$10,000. While there is absolutely nothing wrong with this, let’s look at the following scenario:
It is, in our humble opinion, at point three where a trader is defined! If you take the setup you’re essentially breaking your rules! It will be even worse if the trade turns out to be successful as this will further reinforce this bad habit.
Now, let’s think about this from a different angle. If you managed client funds for a living and were trading a $1,000,000 account, would you still take that same trade that nearly fulfilled your entry guidelines? We hope the logical side of your brain kicked in here and said no! Therefore, you have to learn to think ‘as IF’ you are a professional (disciplined) money manager, not a gunslinger. As a result, trading should, quite simply, become a repetitive chore: wait – trade – wait – trade. If you see a setup, you trade. If you don’t, you either hunt for more setups or go and have a life!
It does seem somewhat counterintuitive that a boring (but disciplined), almost laid-back approach, is usually the more successful. We know this will not likely sit easy with some of the readers, but it is the truth. Disciplined trading, with a clear mindset and a solid trading plan, is KEY to success in this game!
For those new to the world of trading, we would advise learning a simple trading method to begin with. Master the setup and trade it flawlessly in accordance with your plan. In addition to this, KEEP risk to 1-2% per trade. For additional guidance, you may want to follow our daily market commentary here: IC Markets Daily Analysis. We cover eight pairs using the weekly, daily and H4 timeframes to find setups using a relatively basic, yet high-probability, style.
IC Markets is revolutionizing on-line forex trading; on-line traders are now able to gain access to pricing and liquidity previously only available to investment banks and high net worth individuals.