My take away trying out Forex trading
SourceI recently decided to try trading forex and man won a few trades and the winning got to me that I made some few mistakes and lost a good amount in my capital. I would be lying if I said it was not quite painful. I now believe what they say, you must be able to manage your emotions if you ever want to venture into forex trading. I learned a few lessons from my losses and my knowledge of the whole forex market has increased at least.
My experience has taught me that in Forex trading, you will make gains and losses but your success will depend much more on how you can manage your losses and not making high profits. For sure you are going to make profits as well as losses. The profits no matter how little will not hurt but the losses if not properly manage will hurt you very badly. You might win 10 trades in a row but one loss if not properly managed can drain your accounts dry.
I also realized the psychological impact this kind of trading can have on a person especially when one is at the end of a losing trade. There was a day I practically could not go a minute without looking at the charts hoping things had turned around in my favour and every time, I was disappointed. To make things worse, I started holding on to losing traded hoping the tides will change but the more I waited, the higher the amount of my losses. Yeah, I failed to utilize the stop loss feature and that was a terrible mistake on my part.
I guess I just wanted to try it out with a small amount since so many people have talked to me about it. Even though, I lost almost half of my capital, it was a good experience and I am better off now. I totally agree if I really want to go into this, I will need to properly educate myself on this and use the services of a mentor too. I think a proper loss management lesson is what I really need. Plus, I will also have to build up a good start up capital too. Like most experienced traders say " You need money to make money", I now read the meaning in that clearly. A small account will not be really profitable unless you want to take huge risks which can either bring great returns or bleed your account out.