Questions have been streaming in on what one needs to do to become a trader. I usually try to answer this question by being as real as possible because the idea that is engraved in most people’s minds is that they can take up trading by themselves and do it as a hobby or on the side without taking too much time into laying the groundwork that is needed to become a professional trader. My friends, that is far from the truth for beginning traders as well as advanced traders. So, what are the practical elements of trading currency markets?
Uncertainty is the name of the game. Like every other business venture, one has to factor in risk parameters that may affect his profit margins. In this case, there is a very high probability that the trades that you take could turn out profitable or could be losses even if you rightfully execute your trading strategy. That’s the nature of the markets. Being awake to uncertainty prepares you to know what’s at stake and helps you properly seek ways of mitigating risks involved in depleting your trading account. Some of the measures to deal with risks associated with trading could be; being well capitalized, adhering to risk reward ratios, controlling the constant urge to over-trade when the markets do not present you with an opportunity to trade, ability to cut and take losses without fuss or emotions and understanding that patience is necessary to longevity in this business.
For one to be a professional trader, it takes time and years of learning and relearning who you are because your personality by extension determines what type of trader you become. One legendary trader once said, “if you want to know who you are, become a trader”. I would like to say trading helps you become a better person in your relationship with attributes such as fear, hope, greed. The nature of trading is that it gives you no chance to display those emotions because once you do, the result is obvious, your trading account takes a hit and in the wrong turn. In this regard, if you really have no time to learn and cannot dedicate hours of your time in the day especially during the first few years to grasp how trading works and allow yourself to be tested by the markets, then it would be wise consider doing something else.
Finally, I would like to put it out there that individual effort and discipline is just as important to your trading as your trading capital, without both, you cannot trade. Let no one lie to you, no amount of reading, motivation or watching tutorials online can make you a professional trader without application. I get fascinated by people who dive right in to online video content with the hope of getting tips or short cutting their way into trading. The end of their stories ends up with them blaming someone else for their own decisions. No one except yourself will help you become a trader. While self educating is good, trading demands that you apply what you have learned in a real market environment for you to test your skills over time and establish what works for you.
That would be my advice on the practical elements of trading. Feel free to contribute with your thoughts on the same on the comment section.
(Article published by Sylvia Muchai)