All the forex market trading knowledge in the world is not enough to help, unless you have the balls to buy and sell currencies and put your own money at risk. As with the lottery "You gotta be in it to win it". Trust me when I say that the simple task of hitting the buy or sell key is difficult to do when your own money is at risk.
You will feel anxious, even fear. Here we have the moment of truth. Do you have the courage not to be afraid and act anyway? Unless you can conquer or accept your fear and do it anyway, you will have a hard time being a successful trader.
Once you learn to overcome your fear, and it does get easier, the inverse reaction can become an issue - you become overconfident and not focused. Start by accessing yourself. What type of person are you? Are you the type that can control their emotions even under extreme stressful conditions? Or, are you the type of person who is overconfident,cocky or arrogant? Then you will be prone to take more risks than you should. Before your first real trade you need to look inside yourself and get the answers. We can correct any inadequacies before they result in paralysis (FEAR) or a huge loss (ARROGANT). A huge loss can end your trading career instantly, or prolong your success until you can raise additional capital.
Both the inability to initiate a trade, or close a losing trade can create serious psychological issues for the trader going forward. By calling attention to these potential stumbling blocks beforehand, you can properly prepare prior to your first real trade and develop good trading habits from day one.
The difficulty doesn't end with "pulling the trigger". In fact what comes next is equally or perhaps more difficult. Once you are in the trade the next hurdle is staying in the trade. When trading foreign exchange you exit the trade as soon as possible after entry when it is not working. Most people who have been successful in non-trading ventures find this concept difficult to implement. Please refer to Success or Failure
For example, real estate tycoons make their fortune riding out the bad times and selling during the boom periods. The problem with trying to adapt a 'hold on until it comes back' strategy in foreign exchange is that most of the time the currencies are in long-term persistent, directional trends and your equity will be wiped out before the currency comes back.
The other side of the coin is staying in a trade that is working. The most common pitfall is closing out a winning position without a valid reason. Once again, fear is the culprit. Your subconscious demons will be scaring you non-stop with questions like "what if news comes out and you wind up with a loss". The reality is if news comes out in a currency that is going up, the news has a higher probability of being positive than negative (more on why that is so in a later article).
So your fear is just a baseless annoyance. Don't try and fight the fear. Accept it. Have a laugh about it and then move on to the task at hand, which is determining an exit strategy based on actual price movement. As Garth says in Waynesworld "Live in the now man". Worrying about what could be is irrational. Studying your chart and determining an objective exit point is reality based and rational.
Another common pitfall is closing a winning position because you are bored with it; its not moving. In Football, after a star running back breaks free for a 50-yard gain, he comes out of the game temporarily for a breather. When he reenters the game he is a serious threat to gain more yards - this is indisputable. So when your position takes a breather after a winning move, the next likely event is further gains - so why close it?
If you can be courageous under fire and strategically patient, foreign exchange trading may be for you. If you're a natural gunslinger and reckless you will need to tone your act down a notch or two and we can help you make the necessary adjustments. If putting your money at risk makes you a nervous wreck its because you lack the knowledge base to be confident in your decision making.
Many new traders believe all you need to do to trade profitably in the foreign currencies are charts, technical indicators and a small bankroll. Most of them blow up (lose all their money) within a few weeks or months; some are initially successful and it takes as long as a year before they blow up. A tiny minority with good money management skills, patience, and a market niche go on to be successful traders. Armed with charts, technical indicators, and a small bankroll, the chance of succeeding is probably 500 to 1.
To increase your chances of success to near certainty requires knowledge; acquiring knowledge takes hard work, study, dedication and focus. Compile your knowledge without taking any shortcuts, thereby assuring a solid foundation to build upon.
For more info try http://www.greatforexspot.com
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