You have been trading forex for some few years now, yet you have not made any tangible profit from the market. You’re feeling frustrated and unhappy. You think your village people are after you right, lol.
I get the gist. But here’s one thing I have come to realize. Unprofitable traders indulge in bad habits that mar their progress and ability to make a living trading forex.
Some of these habits include;
Some one asked me if as a beginner it is compulsory to show up on the chart everyday? I asked him if it is possible for an employee to just wake up one morning at anytime of the week and call his boss to say that he did not feel like working for the next 5 days for no good reason?.
He laughed and said that it was not possible but then even if the employee did that, he could get sacked or probably not get paid.
So what I am bringing out of this is, you cannot expect to be paid or make profits from the market if you just show up anyhow and any day you like especially if you are just starting out.
Make it a part of your routine to always show up everyday regardless. You do not necessarily have to trade everyday. You can choose to study price movements on the charts on days when there are no trading opportunities.
They Give Up Too Soon
Yes I get it, trading may not necessarily be for everybody but people who start out on this career path give up at the slightest experience of frustration before ever giving themselves a chance to succeed.
When you are quick to throw in the towel, it is a sign that you also give up on other worthy businesses or fields when challenges come. It is a bad habit that causes you to be unprofitable. Not just in trading, but in life generally. The frustrations will come, no doubt, that’s why you need good mentorship and a healthy trading community to guide you through the process. If you isolate yourself from mentorship, when the difficult times come, you may easily give up. However, regardless of the challenges, whether or not you have a mentor or not, keep going. Don’t give yourself any excuse or reason to fail. Who knows, it is possible that you’ll become profitable tomorrow but then you give up today. You are closer than you really think so why do you want to let go now?
This may seem really insignificant but you’ll be amazed at how detrimental it is to your trading success.
Whether you like it or not, you will reap what you sow. Negative self talk will give you negative results. When you continually make statements like,
”Me wey be olodo”
”I am not good enough”
”I’m f**ked up”
”This market is killing me”
”My village people are following me”. Yes your village people will continue following you because you keep inviting them with your mouth. In James Allen’s ” As A Man Thinketh , he mentioned that “Man is made or unmade by himself; in the armory of thought he forges the weapons by which he destroys himself; he also fashions the tools with which he builds for himself heavenly mansions of joy and strength and peace” Instead of being negative about the outcome of your trades all the time, replace those negative talks and thoughts with positive ones, learn from your mistakes and move on to the next.
They Let Losses Run
You have probably heard it severally that you should ride your winners and cut losses short. Traders who struggle to make profits in the market do the exact opposite.
When in a losing trade, instead of closing the trade and accepting the loss, you adjust your stop loss by increasing it with the hope that the trade will reverse. And then your temperature begins to rise, you cannot think straight. You put logic aside and start to ride on emotions, praying and hoping that it come back to your entry at least. Then when you are in a winning position, you are quick to cut profit short for fear of losing it back to the market. If you find yourself riding on this habit, it could also be the cause of your unprofitability in trading.
Not Sticking To A Fixed Risk Management Plan;
You do not stand a chance of making it in this Forex space if what you are constantly changing your risk exposure. It is always advisable to stick to risking 1% of your trading capital on your trades. You can’t risk 2% today then risk 5% tomorrow, 10% the following day and expect to get consistent profitable results. Develop a strict risk management plan and follow it through. You do not necessarily have to increase your risk because ” the trade looks good”. Always keep it at the back of your mind that trading is a game of probability. The most quality trade setups still stand the chance of ending up in losses.
If for instance you trade a $5000 account, you can decide to risk 1% for a given period, let’s say 3-6 months. Then gradually increase your risk exposure as your skill and experience grows.
For some people risking a certain amount consistently is what what works for them. On a $5000 account, they can decide to stick with not losing more than $70 on a trade.
Depending on your risk appetite, just ensure you are not always hopping around and playing with your risk management. It is a bad habit and which ultimately leads to unprofitability.
They Let Emotions Control Them
We all have emotions and having a good knowledge of what emotion controls your trading decision is a very key thing to note. Greed, fear, anxiety, over confidence, revenge are major emotions traders both new and experienced battle with.
New traders are more likely to be trapped in the emotional race as their focus majorly is on just making money either by crook or cranny. Greed will cause you to increase your risk or just throw in a random high lot size which in the end could eventually wipe out your trading account balance. Fear of losing money may cause you to hesitate on entering a trade that could possibly yield a 100% return. Regardless of your trading level or experience, as time goes on, you will realize that trading will help you discover more about yourself and help you understand what emotions trigger you most of the time. This way you can work towards taming it to avoid causing damage to your trading career.
The Forex market is worth over $6.6 trillion. Stop what you’re doing and think about this amount for a moment. It means that there’s enough money to go round for everyone. The market is a neutral place and is not against you making as much as you want but bad habits like these would ruin your chances of making even a $1 from it.
Identify and acknowledge any bad trait you may notice in your trading and continuously work on replacing the bad patterns with good ones and you will be amazed at how far you will go in this space and beyond.
What other habits do unprofitable traders exhibit? Please share them with me in the comments below and if you got questions, kindly contact me here.