The web is full of people, experts or not, who provide advice on Forex trading. Strategic and operational advice, recipes that - at least in their intentions - should allow even the most inexperienced users to generate profits. This article focuses on another aspect, another type of suggestion, concerning the mindset, the set of positive and useful thoughts that any trader, whether experienced or not, must have. For a broader set of practical tips, see effective forex trading tips.
Not All Is Lost
Beginners, those who trade for the first time, tend to get discouraged quite easily. Their conviction is that, since they have lost once, they will always lose. Therefore, sad and angry with themselves for having tried, they withdraw from the game. In these cases, the trader's career ends before it even begins. This is not only a negative thought but also a wrong one. It is not true that those who have lost are destined to lose for eternity. Many stories, in trading as in life, begin with a defeat.
The Importance of Discipline
In the collective imagination, the speculative investor is a courageous, creative, borderline person. It's a myth that does not reflect reality. The successful trader is much more "gray," more of a bookworm than a wealthy socialite. The secret? Discipline. Forget about creativity! It's better to be disciplined, create a strategy, and follow it in a precise, determined way, without any distraction. Among the most common mistakes in Forex Trading, in fact, stands out the deviation from one's strategy, thus entering uncharted territory full of unforeseen events.
The Question of Gambling
Okay, luck counts, but no more than in any other context. So gambling is a guest that has no citizenship in Forex trading. Yet many aspiring traders, in their hearts, associate speculative investment activities more with a bet than with an experience of hard work and effort. After all, they say "playing the stock market." Well, thinking of trading as a game of chance is the quickest and surest way to lose your money. Trading with this belief pushes one to commit reckless acts, to expose oneself, to dangerously navigate by sight. This mindset is closely related to what is known as the alchemist syndrome.
Isolation: the Chart Syndrome
It's a very common disorder among traders, including experienced ones. There are, in fact, those who rely excessively on technical analysis, almost venerating it as if it were the only possible point of reference. In truth, there is another one of equal importance: fundamental analysis. Whatever the fanatics say, not everything is discounted by the market. Not immediately, at least. It is, therefore, necessary to study external factors, to inform oneself about what is happening from a political point of view as well. Everything can have an influence, so it is good to come to terms with it and transform a threat (the considerable interdependence of markets and outside markets) and exploit it to generate profits. For more on reading these dynamics, see mastering market dynamics.
Is One Broker as Good as Another?
No, absolutely not. Yet beginners often believe that relying on this or that broker makes no difference, as long as they are honest. Obviously, honesty is a fundamental characteristic, a true conditio sine qua non. However, the vastness of the offer, the quality of assistance, and the performance of the platform also count. Especially at very high levels, the difference between an efficient broker and a mediocre one is felt. Given that it is easy to spot the dishonest ones (just check if they have a license), it is much more difficult, without proof, to decree the mediocrity of a broker. In this regard, demos come to the rescue, allowing you to try a real account before depositing any sum of money.
