April 24th, 2018 | Updated on June 17th, 2020
Are you simply dying to make some money from trading Forex? There are millions of traders just like you, who have big dreams of making millions from trading stocks all day long.
However, we only hear one or two rags to riches stories each year that begins with an amateur trader with nebulous dreams. In most cases, the fear of losing money consumes traders, and they end up making terrible investments.
The fear of failure is the first reason more traders fail. Before you start trading today, ask yourself two questions –
- Why Am I Trading?
- What Kind Of A Lifestyle Do I Want From Trading?
Most amateur traders hardly think about trading as a passion. To them, trading is a shortcut to a fortune that can bring them all the luxurious of life. If you identify with these traders, you are trading for all the wrong reasons.
You need to know why you are trading to know where you are headed in the long run. If you are here for the short-term jackpot, it is time to rethink your strategy.
Are You Trading For All The Wrong Reasons?
Losing some money and not making enough on a few deals are parts and parcels of trading. You can always ask your day trading mentor to learn more about the reasons people fail to make money from trading, but here are the five reasons we think you might not be making as much money as you should.
I. You Are Always Worrying About Losing Money
There are people, who commit their life’s savings to trading. These are also the people, who are the most afraid to lose money on stocks and trades. When you are afraid to lose money, you are always focusing too much on short-term success and ignoring better investment opportunities. You should never trade with what you cannot afford to lose.
II. You Do Not Have A Trading Strategy
Yes, it is true that development of a trading strategy takes time and experience. However, always thinking about making fast money shifts your focus from learning how to trade. This can be detrimental to your trading portfolio. You make yourself more vulnerable by simply ignoring the need to develop a trading strategy.
III. You Don’t Have Enough Discipline
Even stock trading requires scheduling and discipline. The market is always on a roll, and you need to develop a habit of following the trends every day. Following the top traders and learning more about their strategies will help you develop trading discipline. The lack of discipline always brings emotions to the table that can intervene with sound decision making.
IV. You Are Ignoring Your Mistakes
All traders make mistakes. That is the truth of the market, and you need to accept it. If you have made mistakes in the past, if you have faced failure, you need to embrace the past. Only by revisiting the mistakes will you be able to move towards success. Ignoring them will cause you to repeat them time and again.
V. You Are Not Sticking To Your Plan
Trading is quite awesome since you get to be your boss, but that also means that you get to decide where you draw the line. Not sticking to the plan has probably gotten you into trouble before and a deluge of negative trends should not sway you from your plans regularly. Do not let your emotions get to you. Focus on earnings and market economics to look beyond ephemeral losses.
Why Should You Be Trading?
After a brief recounting of the facts that lead to bad trading decisions, we are finally here to discuss the right reasons for trading.
i.Trade For The Love Of It
Trading is more than a chore or a responsibility. It can be your passion, hobby or your love. It is quite exciting, and you will only perceive that once you stop worrying about all the money you might lose.
ii.You Are Learning From It
Trading helps people train their brains for better analytical thinking and rational decision making. Your brain needs the right stimulus, and you can start by maintaining spreadsheets, notes, and schedules. Leading traders learn from their mistakes and their actions every day by maintaining a detailed log of their actions.
iii.You Love The Thrill And The Competition
While most people will tell you that competition can be unhealthy, trading is one way you can channel your competitive instincts. If you are a fiend for thrills in daily life, trading is going to be your best friend. The idea is not to earn a decent living but to compete with the top 10% of the traders, who are making millions each year by making smart trading choices.
iv.You Love Your New “Job.”
While trading might not be your day job, you have full right to love it. It can bring in extra cash for you, your hobbies and your family. It can help you pay off your student loans and other outstanding debts. Trading is more than a job since it involves more passion, commitment, and excitement than any other desk job in the world.
v.You Love Finance And The Graphs That Come With It
If you have always loved every aspect of economics, finance and the squiggly graphs that came with it, know that you are not alone. You have finally found a world of other traders, who share your fervor for the subject and are making a living out of it.
Almost all newbie traders step into the world of trading wishing for a luxurious life and big bucks. Soon the ones that truly love trading start making the big bucks and the ones here for the shortcut to glory fade out. The key to making all the money trading is to stop thinking about the money and start loving the process.
Author Bio:Paul Ellis is a day trading mentor at a renowned social trading company. He is also a full-time professional trader and a part-time author.