“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: Inverted hammer has exposed trendline support
EUR/USD risks falling to support of the trendline rising from Oct. 1 and Nov. 29 lows. The pair carved out an inverted bearish hammer on Tuesday, as it faced rejection at 1.1118 and ended on a negative note.
GBP/USD: Aims to revisit 200-hour SMA, immediate support trendline
GBP/USD registers mild losses while trading around 1.3045 during Wednesday’s Asian session. The pair earlier reversed from 50% Fib retracement of its fall from Jan 07 to 14. A two-week-old falling trend line adds to the resistance.
USD/JPY rises above 110.00, potential head-and-shoulders on 1H
Risk reset in stocks is boding well for USD/JPY. The pair may be forming a head-and-shoulders pattern on the hourly chart. The bulls are not out of the woods yet and a break above 110.12 is needed to invalidate lower highs setup on the hourly chart.
Editors’ Picks
EUR/USD: Inverted hammer has exposed trendline support
EUR/USD risks falling to support of the trendline rising from Oct. 1 and Nov. 29 lows. The pair carved out an inverted bearish hammer on Tuesday, as it faced rejection at 1.1118 and ended on a negative note.
GBP/USD: Aims to revisit 200-hour SMA, immediate support trendline
GBP/USD registers mild losses while trading around 1.3045 during Wednesday’s Asian session. The pair earlier reversed from 50% Fib retracement of its fall from Jan 07 to 14. A two-week-old falling trend line adds to the resistance.
USD/JPY rises above 110.00, potential head-and-shoulders on 1H
Risk reset in stocks is boding well for USD/JPY. The pair may be forming a head-and-shoulders pattern on the hourly chart. The bulls are not out of the woods yet and a break above 110.12 is needed to invalidate lower highs setup on the hourly chart.
Coronavirus FX Selloff, CAD Prime for Bank of Canada Breakout?
The most influential story for the financial markets today was reports that the first US case of corona virus has been confirmed. This deadly virus is spreading across the globe creating concerns about the impact on travel and consumer spending.
Gold remains under pressure around $1,551 as US dollar keeps the gains
Gold bounces off the intra-day low of $1,550.40, flashed a few minutes back, to $1,551.30 by the press time of the pre-European session on Wednesday. In doing so, the safe-haven ignores the geopolitical risks emanating from China.
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