Each of us know the taste of defeat, loss. Most of us also know the taste and scent of success and “easy” money offered by Forex. Easy because it is nice to look (after taking the right decisions) when our account is growing. So what should we do to have less losing positions than profitable or those profitable to outweight the losing ones?
How not to loose on forex?
Each novice trader faces many obstacles on the way to success. Gaining knowledge and experience often requires years of study and practice, which in most cases is associated with fairly significant losses of capital, which every novice investor has to pay in the context of “apprenticeship”.
How to cope with this huge financial and mental health burden in order to survive this period and begin to systematically and steadily make money? This question bothers most people. Not many, however, realize that the time and cost is a kind of investment in the future, the value of which we set ourselves. While we can not predict how much time we have to spend to start earning steadily, costs can be kept to a minimum. I’m not talking about investing only on and on in your account DEMO because it leads nowhere. Speculating on a virtual account does not take into account the emotions that are pain in the neck for most traders and cause many stupid decisions. Demo is a good start to learn how trading platform works and to get familiar with market. Personally, I recommend as soon as possible transition to a real account and speculate on real money. To do this, you can use the bonuses offered by brokers.
Many traders, especially beginners, starts from the assumption that there is no need to waste time learning and trading with small amounts. They want a lot and quickly. Such an approach is due to the ignorance of facts and misconception of reality. People start watching films on the Internet and believe without a doubt trainers promise how quickly and safely you can earn millions. This is because life is short, many people come to the market to improve their current financial situation and believe that if they do not earn fast, then it does not make sense.
You should ask yourself a question. If you do not have enough time to earn slowly do you have enough time to lose ?
This what we lose while learning and gaining experience depends on the risk that we want to take. Is it not better to take advantage of the welcome bonus and learn on money offered from broker? Is not better to invest a small portion of our savings and allocate it to learn without worrying about whether we lose or earn? To start making money necessary is experience and familiarity with the market. To take “practice”, to build individual investment strategy and gain confidence you require to realize tens and even hundreds of transactions. So why throw ourselves to deep end and gamble risking our life savings? Definitely better solution is to set up even a micro account and learn the positions of the value of 0.0001 lot, where the transaction has a minimum value of EUR 10 (!). This approach will give a huge advantage in the future.
Suppose that in order to build your own personalized strategy you need 1 000 transactions, of which 70% will be losers and the risk to reward is equal 1:1. Consider whether cheaper solution is posting of 700 losing positions with a value of 5 zł, the sum of which will be 3500 PLN and 300 transactions profitable for the amount 1500 PLN. In this way, the cost of your learning will be 2000 PLN. See how easily you can recalculate cost increase risking on position = 10 PLN. Does this assumption makes sense?
So how to approach professionally to learning ?
We should define our budget for investment. From this amount determine a percentage you want to spend on education. Place this amount on a broker account and open positions risking up to 0.5-1% of this amount in a single transaction. Your profits will not be large but do not think at this point about it. Try not to look at profits through the prism of the amount but through a percentage of capital invested. In this way, you’ll soon discover that, despite the small amount, your profitable positions are valuable.
After you start making money
When you gain experience and start earning systematically engage the remainder of your capital not forgetting to use rather percentage than amount approach. In this way, the profits will increase significantly and thanks to earlier reduction of costs incurred on learning you will much faster make up all losses associated with it and start to multiply capital, which was your target.
H. Jackson Brown said: “Do not give up a goal only because it takes time to achieve it. Time flows anyway. ”
Consider, however, what to do to not lose at the same time all your savings and prolong up your time on the market.