20 Steps To Stop Losing Money
This is good for general trading, not specific to FX but rules are just the same.
Here's a reality check as we slam headfirst into the January markets. The vast majority of retail traders lost money in 2007 and will lose money next year, despite ample doses of education, enthusiasm and brilliant ideas. In fact, at least 80% of all at-home speculators will eventually give up and wash out of the financial markets.
How can you buck this enormous tide and make 2008 your most profitable year in the trading game? To state the obvious, the best way to start making money is to stop losing it.
In that regard, here are 20 ways to staunch the bleeding and get back into the winner's circle in the new year. Happy holidays, everyone!
- Don't trust the opinions of market gurus. Remember that it's your money at stake, not theirs. Listen to what they say, then step back and do your own homework.
- Don't believe in a company. Trading isn't investing, so you need to focus on the price action and forget the balance sheets. Leave the American Dream to Warren Buffett.
- Don't break your entry and exit rules. You made them for bad trades, just like the one you're stuck in right now.
- Don't try to get even. This isn't a game of catch-up. Every action you make has to stand on its own merits. Take your losses with detachment and make your next trade with absolute discipline.
- Don't trade over your head. If your last name isn't Kass or Cramer, stop trading like them. Just concentrate on playing the game well, and stop thinking about making money.
- Don't seek the Holy Grail. There is no secret trading formula, other than good position choice and solid risk management. So why are you looking for it?
- Don't forget your discipline. Anyone can learn the basics of the trading game. Sadly, most of us will fail because of a lack of self-control, not a lack of knowledge.
- Don't chase the crowd. Tune out the groupthink and dance to the beat of your own drummer. Get out of the chat rooms and off the stock boards. This is serious business.
- Don't trade the obvious. Everyone sees the most perfect-looking patterns, which is why they set up the most painful losses. Simply stated, if it looks too good to be true, it probably is.
- Don't ignore the warning signs. Big losses rarely come without warning. Don't wait for a lifeboat before you abandon a sinking ship.
- Don't count your chickens. That delicious profit isn't yours until you close out the trade. Trail stops, take blind exits and do everything possible to get that money into your pocket.
- Don't forget the plan. Remember the reasons you took a trade in the first place, and don't get blinded by greed or fear when the position finally starts to move.
- Don't have a paycheck mentality. You don't need to get paid every week or every month, as long as you take advantage of the opportunities as they come. Classic wisdom: traders book 80% of their profits on just 20% of the days the market is open for business.
- Don't cut corners. There are very smart folks out there working full time to take advantage of your mistakes. Fight back by examining your results, updating your plan and finding working themes for the next session.
- Don't ignore your intuition. Listen to that calm little voice that tells you what to do and what to avoid. That's the voice of the winner trying to get into your thick head.
- Don't hate losing. The best traders lose money on most of their positions, so get used to the pain of losing. And there's a side benefit: the losing teaches more about winning than the winning itself.
- Don't fall into the complexity trap. Traders who can't see the market are looking for it everywhere except in the price action. In truth, a well-trained eye will find more profits than in a stack of technical indicators.
- Don't confuse execution with opportunity. Expensive software won't help you trade like a hedge fund. Pretty colors and flashing lights make you a more nervous trader, not a better one.
- Don't project your personal life onto your trading.Trading gives you the perfect opportunity to find out just how messed up your life really is. Get your own house in order before you play the financial markets.
- Don't think that trading is fun. The trading game should be boring the vast majority of the time, just like the real-life job you have right now. (Source: Right Hard Edge)
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I agree with number 1.....sometime I trust Market Analist, sometime their prediction is right, but most of time not really right happen in that time...
Usually I already got loss before market reach the target.
Maybe in next trade, I just have analyze my system,,,,,,Market Guru is just for technical source.
too many to remember. I would agree on most but not on some. These steps are from where?
I am a hosted slave beta.
Originally posted by megrawabtoo many to remember. I would agree on most but not on some. These steps are from where?
It says, 'Source: Right Hard Edge' at the bottom, whatever that is.
Another way not to lose money is to learn HOW to lose money and do what you can to not to do it (again).
Why is the angle always, don't do this or don't do that? Why not think of it as 'you do this, and that will happen'? That is a much scarier and realistic thought.
I would change number 1 to:
If you trust the opinions of market gurus, YOU WILL LOSE YOUR ACCOUNT!. They often have much more money than you do and may trade more riskily than you, or they may not actually trade at all.
If you trust the opinions of market gurus, YOU WILL LOSE YOUR ACCOUNT!. They often have much more money than you do and may trade more riskily than you, or they may not actually trade at all.
If a beginner will ask a guru about some strategy and then he tries to implement that strategy then obviously it will blow up his account. The reason is he dont know each aspect of that strategy. But it is good to discuss with Market Pros about already developed strategies. Maybe they can help in upgrading your strategy.
As a novice, you should learn yourself about market. But as an experienced trader, you must discuss your ideas with another experienced trader.
Stick to your rules
I don't think gurus and pros are the same.
Gurus are supposed to be well known in their field, but many of them seem not to be. They happen to be people selling something with promises of endless riches and FOREX secrets on those 10 page scrolling websites with things like FOREX SECRET REVEALED or USE MY SYSTEM AND ....
Pros on the other hand, are professional and have a genuine desire to help.
Originally posted by leebutI don't think gurus and pros are the same.Gurus are supposed to be well known in their field, but many of them seem not to be. They happen to be people selling something with promises of endless riches and FOREX secrets on those 10 page scrolling websites with things like FOREX SECRET REVEALED or USE MY SYSTEM AND ....
Pros on the other hand, are professional and have a genuine desire to help.
Do you you call them gurus? well then maybe u have only seen those gurus. But in my opinion they are "so called gurus". Those are scammers and not gurus. Pros and gurus represent people with authority in their field. Both words are used for same purpose but I think Guru represent more knowledgeable person.
Originally posted by megrawabtoo many to remember. I would agree on most but not on some. These steps are from where?
this is not a matter from where i got the points the point is to follow these and keep in mind i have a borad and i print these type of points and see every day in front of me and there are lot f other things that are at my mirrir and when i see my face on mirrir i see that points and todo list in my trading .
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Here are some more points to share with you guys.
1. Gamblers go to casino. All unproved, spontaneous actions in Forex trading — are a part of pure gambling.
Any attempt to trade without analysis and studying the market is equal to a game. Game is fun except when you are losing real money
2. Go with the trend!
3. Never invest money into a real Forex account until you practice on a Forex Demo account!
4. Always take a look at the time frame bigger than the one you've chosen to trade in.
5. Never risk more than 2-3% of the total trading account.
6. Put emotions down. Trade calm.
7. Choose the time frame that is right for you.
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Nice sharing sadscorpion.
this is not a matter from where i got the points the point is to follow these and keep in mind i have a borad and i print these type of points and see every day in front of me and there are lot f other things that are at my mirrir and when i see my face on mirrir i see that points and todo list in my trading .
Thats a good habbit. Coz many of us have read these things on different places but we always forget while trading. So such points should be written or printed. This is a good way to remember things.
yaa thank you for supporting my point dear
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