I was on a losing streak. The dealer had the blackjack and I was bust. I only bet $100, but the bet was all or nothing. Normally, I would accept the loss and place another bet, hoping to have better luck. But I wanted to be in control of my game, so I decided to research forex trading platforms and start forex trading. Being in front of my trading platform on the first day was a real rush. I felt like I was behind the new Porsche my online trading broker was giving away as a prize. The trading tools on my dashboard were flashing, enticing me to take them for a spin.
My first week of forex trading was rattling. My forex account was down $50 on day one. The problem was, I was still thinking and acting like a gambler. Unsuccessful forex traders and gamblers have a lot in common. They both share an incapacity to control their behavior, and tend to engage in excessive behaviors.
Overcoming the Gambler’s Mentality
But there’s also an important difference. I could take control of my FX trading outcomes. I hunkered down, backtested my forex trading strategy, adjusted my trade parameters and demo traded for a month. Then it was time to go full throttle on a live account again. When I did lose, my losses narrowed after tightening my stop-loss level. My fortunes changed and I started to make a profit. Trading is a skill, not a roll of the dice. By improving my trading skills, I was able to cut my losses and stay in the game by improving my trading performance.
Forex trading is about freedom and being in charge of your life, not leaving your fortunes to chance. The forex exchange market is the largest and most liquid financial market in the world with over $5 trillion in daily trading volume. Diverse opportunities and possibilities to profit exist across the over 50 currency pairs offered by most forex brokers. But like any skill, how well you do depends on the effort you put into training and education. As you make personal progress, your confidence will increase along with your skills. Confident traders do better. And training and education increase confidence.
I started with TradeFW.com, a reliable broker for beginner traders, with account managers dedicated to helping you become a proficient trader. The best forex trading platform for beginners will provide training and education as you trade. Forex trading books and seminars are definitely helpful; however, when you are actually trading it is a completely different world. I always recommend learning forex trading currency online on the system you will be using. FX trading is fast-paced and you need to be comfortable and confident in your trading environment.
Steps to a Profitable Trading Strategy
The Forex trading system you choose will have a significant impact on your confidence level. For many beginning forex trading, Metatrader is the system of choice but choose the system that best suits your trading style.
You will want to choose a forex broker and education provider that supports your trading system. Ensure you choose a regulated currency exchange broker. Not only are you more likely to be insured against losses, but did you know that regulated forex brokers are less likely to be hacked? New forex trading companies pop up every day, and many are not regulated, or they may not be regulated in your jurisdiction.
As your investment in a trading system and training begins to pay off and you become a profitable trader, your confidence will begin to build. You could even become overconfident! The belief that overconfident traders overestimate forecasts and thus risk-adjusted profits is a myth for the educated and experienced trader. It is true, though, that the inexperienced trader engages in excess trading that contributes to currency price volatility. With experience and training, the overconfident trader improves precision. That said, if you are a big player in the market, too much confidence can also lead to you manipulating the market, and you could find yourself in some serious legal trouble if you do so. Therefore, it is best to avoid any such intentions. However, it could be helpful to hire legal representation from reputed law firms (visit https://www.sidley.com/en/us/services/securities-enforcement-and-regulatory/ for more information) that are experienced in these fields, and could be able to assist and defend clients.
Well, overconfidence is less likely to lead to poor trading performance with a proficient online trading system. The best-regulated forex brokers provide an intuitive, easy-to-use interface with all the trading indicators you need to predict price forecasts. Related market news should also be integrated into the system. Information outside of the currency market including news on economic events and growth is reflected in forex prices and trading patterns.
Forex trading training starts with the basics. What is forex trading? What technical analysis tools and skills do I need to succeed? These technical analysis tools provide crucial information on forex trading signals. You can then begin to experiment with more complex trading strategies and systems.
Some believe that trading versus long-term investing is like gambling, but it should not be. If your trading strategies are not profitable, ask yourself if you were thinking like a gambler instead of a trained trader.