“I got a mentor, did my homework, understand the fundamentals, and backtesting my technicals, but why am I still losing money? Is trading just a scam?”
I cried and burst out to my girlfriend years ago when I blew up my account, again. It was not only about the financial loss, but it was frustrated because nothing seems to work and the market certainly did not reward my handworks. I felt unfair, I felt being cheated, and I felt angry, very very angry.
Fast forward, I still lose money every day (like today) and every trade, as I always love to tell beginners, “learn to love your losses because it’s part of the game.” It’s true, no matter how good your winning rate is, you will always have losses. You might have 95% of winning percentage in your backtesting, but that still means you will have 5% of losing trades and you never know when that 5% of losses will appear. Most importantly, you never knew how much trades you will have in your lifetime. 5% of 100,000 trades is still 5000 losing trades. Some people just couldn’t take it.
Yes, that is it. Some people simply cannot deal with the losses or setbacks in life. Trading is all about the execution, and the execution is all about your emotions. Sure, you need to have a good analysis, a good strategy and an approach to your trade, but when you execute the trade and start managing them, that is an emotional game.
Trading psychology is perhaps the most ignored area in all trading courses because it’s tough to teach as trading psychology is just a self-discovering journey for every trader to experience. Everyone loves to talk about the strategies, the winning rates, the forecast, and predictions, but what separates traders from success to failures is the execution. No matter how good your plan is, someone has to pull the trigger.
The sooner you spend the time to work on your trading psychology, the better off you will be in this game. And no, EA will not help you because you will let it run when it makes money, but you will turn it off when it started losing - even though you shouldn’t. However, your emotions get in of your way, and you just couldn’t trust the EA anymore. I know because I’ve been there myself.
Finally, be completely honest about your losses as you would toward you wins. Have a trading journal, and enjoy this journey of becoming a great trader. Take a look at today’s video to learn more.
Enho Kuo is NOT a Broker Dealer and engages in trader education and training. All materials given by Enho Kuo are for educational purposes only. This information neither is, nor should be construed, as an offer, or a solicitation of an offer, to buy or sell securities. You shall be fully responsible for any investment decision you make, and such decisions will be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance, and liquidity needs. This material is being provided to you for educational purposes only. No information presented constitutes a recommendation by Enho Kuo or its affiliates to buy, sell or hold any security, financial product or instrument discussed therein or to engage in any specific investment strategy. The content neither is, nor should be construed as, an offer, or a solicitation of an offer, to buy, sell, or hold any securities. You are fully responsible for any investment decisions you make. Such decisions should be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance and liquidity needs.
Editors’ Picks
EUR/USD falls below 1.1850 as US consumer sentiment beats
EUR/USD is trading under1.1850, off the previous levels as US consumer sentiment beat estimates with 78.9 points. The Fed refrained from adding more stimulus, supporting the dollar earlier in the week. Investors are eyeing fiscal stimulus talks.
GBP/USD falls as the EU reportedly objects Johnson's bill
GBP/USD is trading around 1.2950, off the highs. According to reports, the EU remains opposed to UK PM Johnson's controversial bill, which violates the Brexit accord.
USD/JPY: Ready to pierce July’s monthly low
Japan National inflation increased by just 0.2% in August. US Michigan Consumer Sentiment Index is foreseen at 75 in September. USD/JPY at fresh monthly lows as bears keep pressuring.
Editors’ Picks
EUR/USD falls below 1.1850 as US consumer sentiment beats
EUR/USD is trading under1.1850, off the previous levels as US consumer sentiment beat estimates with 78.9 points. The Fed refrained from adding more stimulus, supporting the dollar earlier in the week. Investors are eyeing fiscal stimulus talks.
GBP/USD falls as the EU reportedly objects Johnson's bill
GBP/USD is trading around 1.2950, off the highs. According to reports, the EU remains opposed to UK PM Johnson's controversial bill, which violates the Brexit accord.
USD/JPY: Ready to pierce July’s monthly low
Japan National inflation increased by just 0.2% in August. US Michigan Consumer Sentiment Index is foreseen at 75 in September. USD/JPY at fresh monthly lows as bears keep pressuring.
BTC/USD is on the verge of a massive breakout towards $10,000 or $8,000
Bitcoin has already lost a significant portion of its dominance against other altcoins. After trading sideways for such a long time, many coins are taking advantage of the situation to create massive rallies.
XAU/USD struggles to move back above 100-hour SMA
Gold regained some positive traction on the last trading day of the week and recovered a part of the previous day's losses to over one-week lows. The commodity held on to its intraday gains and traded above the $1950 level through the mid-European session.
RECOMMENDED LESSONS
Making money in forex is easy if you know how the bankers trade!
Discover how to make money in forex is easy if you know how the bankers trade!
5 Forex News Events You Need To Know
In the fast moving world of currency markets, it is extremely important for new traders to know the list of important forex news...
Top 10 Chart Patterns Every Trader Should Know
Chart patterns are one of the most effective trading tools for a trader. They are pure price-action, and form on the basis of underlying buying and...
7 Ways to Avoid Forex Scams
The forex industry is recently seeing more and more scams. Here are 7 ways to avoid losing your money in such scams: Forex scams are becoming frequent. Michael Greenberg reports on luxurious expenses, including a submarine bought from the money taken from forex traders. Here’s another report of a forex fraud. So, how can we avoid falling in such forex scams?
What Are the 10 Fatal Mistakes Traders Make
Trading is exciting. Trading is hard. Trading is extremely hard. Some say that it takes more than 10,000 hours to master. Others believe that trading is the way to quick riches. They might be both wrong. What is important to know that no matter how experienced you are, mistakes will be part of the trading process.