The journey to success, for the amateur trader, is far too often cut short before it becomes a profitable occupation. Typically the outset of the journey is embraced with unrealistic expectation about how easy it is to make money (because that is how it is often, somewhat disingenuously, sold to us), and after a few short months, normally less than six, the initial enthusiasm has wilted and been replaced by frustration and even anger. It is a very, very common story that happens to over 90% of people who decide to try their hand at trading. Yes, professionals make it look easy, and yes, very good returns can be made, but it’s not a quick and easy route to wealth. It takes commitment and it takes discipline. Those wishing to learn to trade must realise this at the outset. It’s when unrealistic expectations fail inevitably to be met that we can so easily turn our backs on what has the potential to be a profitable and rewarding journey.
So, with that in mind there are some fundamentals that need to be put in place at the start.
The first thing is to develop a realistic approach to trading. This means understanding that there are no guarantees, that winning and losing go hand in hand and that quite often the best set-ups will go against us. The market is not tameable.
Therefore, given the unpredictable nature of the market it has to be approached with diligence. What does that mean exactly? Well, amateur trading is often characterised by impatience, wanting to get on with the business of trading and making money; casting around for what look like opportunities to trade and then ‘jumping’ in. It’s quite possible that this approach may yield a few wins, but in trading it’s about the long term, and this approach will not yield long-term profit, in fact quite the opposite. It will only be a question of time before the entire account is lost.
To make a success of trading as an ongoing, long-term means of growing capital a clear-cut and disciplined approach is required. There are three cornerstones that must at all cost be adhered to: A trading plan, an understanding of risk management and the discipline to implement consistently your trading plan and its associated rules. In a way the last, discipline, sounds the easiest and most straightforward, but arguably it’s the hardest of the three.
How does one acquire these building blocks? There is a wealth of self-help material, so much so that it is difficult for a beginner to distinguish the genuinely helpful from the rest. Learning to trade successfully is at the outset very difficult to do on one’s own. It’s important to have contact and feedback with both peers and, particularly, someone with experience and know-how. The unpredictability of the markets makes this particularly so.
Remember, from having a trading plan, an appreciation of risk, reasonable and realistic expectations, and a disciplined approach you will be in a position to build long term profit.
So, with that in mind there are some fundamentals that need to be put in place at the start.
The first thing is to develop a realistic approach to trading. This means understanding that there are no guarantees, that winning and losing go hand in hand and that quite often the best set-ups will go against us. The market is not tameable.
Therefore, given the unpredictable nature of the market it has to be approached with diligence. What does that mean exactly? Well, amateur trading is often characterised by impatience, wanting to get on with the business of trading and making money; casting around for what look like opportunities to trade and then ‘jumping’ in. It’s quite possible that this approach may yield a few wins, but in trading it’s about the long term, and this approach will not yield long-term profit, in fact quite the opposite. It will only be a question of time before the entire account is lost.
To make a success of trading as an ongoing, long-term means of growing capital a clear-cut and disciplined approach is required. There are three cornerstones that must at all cost be adhered to: A trading plan, an understanding of risk management and the discipline to implement consistently your trading plan and its associated rules. In a way the last, discipline, sounds the easiest and most straightforward, but arguably it’s the hardest of the three.
How does one acquire these building blocks? There is a wealth of self-help material, so much so that it is difficult for a beginner to distinguish the genuinely helpful from the rest. Learning to trade successfully is at the outset very difficult to do on one’s own. It’s important to have contact and feedback with both peers and, particularly, someone with experience and know-how. The unpredictability of the markets makes this particularly so.
Remember, from having a trading plan, an appreciation of risk, reasonable and realistic expectations, and a disciplined approach you will be in a position to build long term profit.
Editors’ Picks
EUR/USD hovers around nine-day EMA above 1.1800
EUR/USD remains in the positive territory after registering modest gains in the previous session, trading around 1.1820 during the Asian hours on Monday. The 14-day Relative Strength Index momentum indicator at 54 is edging higher, signaling improving momentum. RSI near mid-50s keeps momentum balanced. A sustained push above 60 would firm bullish control.
GBP/USD holds medium-term bullish bias above 1.3600
The GBP/USD pair trades on a softer note around 1.3605 during the early European session on Monday. Growing expectation of the Bank of England’s interest-rate cut weighs on the Pound Sterling against the Greenback.
Japanese Yen sticks to gains as bears remain on the sidelines amid intervention talks
The Japanese Yen is looking to build on its strong intraday move up amid speculations that authorities will step in to stem weakness in the domestic currency. In fact, Japan’s Finance Minister Satsuki Katayama stepped up intervention warnings and confirmed close coordination with the US against disorderly FX moves. This, along with some follow-through US Dollar selling, triggers an intraday USD/JPY turnaround from the 157.65 region, touched in reaction to Prime Minister Sanae Takaichi's landslide win in Sunday's election.
Editors’ Picks
EUR/USD hovers around nine-day EMA above 1.1800
EUR/USD remains in the positive territory after registering modest gains in the previous session, trading around 1.1820 during the Asian hours on Monday. The 14-day Relative Strength Index momentum indicator at 54 is edging higher, signaling improving momentum. RSI near mid-50s keeps momentum balanced. A sustained push above 60 would firm bullish control.
Gold sticks to gains above $5,000 as China's buying and Fed rate-cut bets drive demand
Gold surges past the $5,000 psychological mark during the Asian session on Monday in reaction to the weekend data, showing that the People's Bank of China extended its buying spree for a 15th month in January. Moreover, dovish US Federal Reserve expectations and concerns about the central bank's independence drag the US Dollar lower for the second straight day, providing an additional boost to the non-yielding yellow metal.
GBP/USD holds medium-term bullish bias above 1.3600
The GBP/USD pair trades on a softer note around 1.3605 during the early European session on Monday. Growing expectation of the Bank of England’s interest-rate cut weighs on the Pound Sterling against the Greenback.
Bitcoin, Ethereum and Ripple consolidate after massive sell-off
Bitcoin, Ethereum, and Ripple prices consolidated on Monday after correcting by nearly 9%, 8%, and 10% in the previous week, respectively. BTC is hovering around $70,000, while ETH and XRP are facing rejection at key levels.
Japan's Takaichi secures historic victory in snap election
In Japan, Prime Minister Sanae Takaichi's coalition secured a supermajority in the lower house, winning 328 out of 465 seats following a rare winter snap election. This provides her with a strong mandate to advance her legislative agenda.
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