Trading Lessons to Know Before You Start
If you are just getting into the world of trading then the simple reality is that you are bound to make some mistakes. This is the way it is because trading whether you are trading forex crypto currencies, the stock market or anything in between involves a pretty steep learning curve for most people who don’t have a solid education and who just start trading because they feel like making money, this learning curve is very steep in it often leads to big losses. With that being said, there are a variety of trading lessons that you need to know before you start which will help make this learning curve much easier for you to deal with.
When we first started trading, we made all of the big mistakes that we wish we knew about and this is what we are here to do today. To provide you with all of the most important trading lessons that you need to know before you ever start trading. The main point here is for us to be able to help you avoid all of the big mistakes that we made when we first started trading. If you pay attention to the various trading lessons that we talk about here today, then your chances of becoming a successful trader increased greatly, especially based on how long it takes you to get to a profitable level.
Important Trading Lessons for Newbies
What we want to do right now is to go over a list of the most important trading lessons for newbies that will help you avoid that steep learning curve, so you can get to making money much sooner than most others.
Be Consistent
One of the biggest trading lessons that we wish we knew before we started is that consistency is one of the most important things for trading. The fact of the matter is that newbie traders will choose one trading strategy and then never really tested out as much as they should.
In other words, newbies might use a trading strategy and win a couple of trades, but then as soon as they lose a couple of trades they will change their strategy to another one folks. This is a big mistake because if you spend all of your time bouncing back and forth between a variety of strategies, you aren’t ever going to master any one of them.
Moreover, let’s face it, as a newbie trader, you aren’t going to innovate or create new trading strategies. You’re going to look up old trading strategies that are proven to work. If you are using olden time tester trading strategies, then there is no reason why you should drop it and move on to the next as soon as you lose a trade.
The reality here is that the trading strategy is not to blame for your losses, but you. You are the reason you are losing trade. What you need to do is to go back to your previous trades, see what you did wrong, and then make the appropriate adjustments. Consistency is key and this is one of the biggest trading lessons that you need to learn before you ever start trading.
You Need a Long Term Edge
Another important and very valuable trading lesson that you need to learn is that while it is in course important to be consistent, it is also important that your trading strategy has an edge over the market. The simple fact of the matter here is that the market is rigged against you and it is hard to win. It is much harder to win trades than it is to lose them.
Therefore, your trading strategy needs to have an edge over the market or in other words, it needs to be proven to be profitable in the long run. While consistency is of course important, if you are consistently losing money, then it is a bad thing. Remember, it is possible to have an edge over the market with a low winning rate as long as your average gains are high.
Moreover, if your average gains are low, it is possible to have an edge over the market with a high winning rate. Therefore you need to have a trading strategy that either wins the majority of the trades you placed with it, or one that has the ability to provide you with huge profits on single trades. Even if you don’t win all that many trades.
There is No Holy Grail
Yet another one of the most important trading lessons that we wish we knew before we started trading is that there is no so-called Holy Grail or amazing trading strategy that will provide you profits no matter what. Sure, there are some trading strategies that work in many conditions as well as some that only work in specific conditions.
What you need to realize here is that the vast majority of trading strategies out there are designed to work in specific scenarios. Some trading strategies are best used for swing trading, while others are best used for day trading. Moreover, there are specific strategies for the stock market for cryptocurrency trading, forex trading, and more.
You need to match the trading strategy you used to the specific conditions as well as the results that you hope to achieve. There is not one single trading strategy that you can use for all types of trading and be successful. It just doesn’t work this way to be a successful trader you need to master a variety of trading strategies.
It’s a Marathon, Not a Sprint
The other crucial trading lesson that you need to realize is that trading is not a Sprint, but rather a marathon. Sure, you can invest a massive sum of money into a single trade and make it big, but the chances are against you.
Remember, the market is rigged against you. It’s much safer to invest small sums into relatively safe trades. The goal here is to build up a large amount of wealth over a long period of time with as little risk as possible. The goal is not to win the lottery with a single trade, as this does nothing but cause you to endure unnecessary levels of risk and stress.
Beginner Trading Lessons – The Bottom Line
The bottom line here is that if you pay attention to the various beginner trading lessons that we talked about today, then your chances of becoming a profitable trader in a limited amount of time increased greatly.
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