Belief is what influences the way we feel and think about everything in life. And in forex trading, belief is definitely one of the biggest influences on success. When we believe in something, it will determine how we act and react.
For example, if you believe that flying is “dangerous” and “scary”, you will feel anxious every time you have to fly, though aviation is the safest form of transportation in the world. It is safer than driving and even walking.
In today’s article, I will list 6 of the most dangerous and most common “beliefs” of Forex traders. They affect the amount of your forex account a lot. Perhaps you may have one or even all of the beliefs below. And if you want to go further with Forex trading, try to limit and eliminate them as soon as possible. Please do, although I know it will be hard.
Foreign exchange trading is my last hope. I bet everything I have into it
If you are confident that “Trading is the only option for success and happiness in life,” you may not be able to earn real money from this risky market.
A person with the mindset of a “risk-taker” believes that trading is the last hope for him/her to achieve financial freedom and dream. He/she is the one who starts with a misleading view and perspective.
People say if you want to achieve something, really yearn for them and use all your resources on them. Yes, this view is true in many cases. But in my view, forex trading is not among this mass.
In fact, when trading, a person should feel completely comfortable and shouldn’t have any real pressure on HAVING TO make money (or even make money QUICKLY). In this way, he may be able to make a lot of money on the foreign exchange market. Do you feel “bitter”?
The most important thing you need to understand about this “belief” is that trading forex is not and will never be your last “hope”. And you should not and will never allow yourself to turn into a “risk-taker,” who can make a lot today but will lose everything in your forex account tomorrow.
Spend time on your main job. Or if you are a freelancer, think of some other investment areas (such as real estate, restaurant – coffee business, etc.). Always ensure the minimum financial level you need. The less you feel NECESSARY for making money on the forex market, the easier it will be for you to earn.
Try to believe me and experience it for yourself.
I MUST win all Forex orders in my account
One of the most common beliefs is that they always feel that every order needs to be a winning one. They do not want to accept a losing order. They try to make every order important and unbeatable.
Their self-esteem doesn’t allow them to lose. And they forget, they do not know nor understand that we always have a random ratio of winning and losing for each order. Every trade has an equal chance of winning and losing.
(Oh, do not understand the words above that trading is no different from gambling. Please read this article.)
Separate yourself from the urge to make money on the market. At that time, you will “unlock” and develop your potential and capabilities in forex trading. Many traders have a losing rate a bit higher than the winning rate. But they still make a lot of money because the AMOUNT of money they make on the winning orders is MUCH bigger than the AMOUNT they lose in losing orders.
They will not exit an order when the risk/reward ratio is not above 1:1. Even if it hits the stop-loss, they still accept it. Because it is an essential part of the “game”.
They understand that with only 1 or 2 standard winning orders, they will recover all their losses and even collect enough profits to offer them a comfortable life for a few months. Do not let emotions overwhelm your trading. 1 + 1 will be equal to 2. If it is A, then it will become B. It’s just that simple.
Trading will “solve” all my financial problems
Many traders rush into the market with a few debts on their shoulders. Or they currently have a tough career which they want to get out of. Or maybe they want to live their life freely, etc. They think that trading will solve all these problems. You need to get rid of all these thoughts in your head if you want to move on in the market.
You need to really have a solid financial background before sticking your toes into this “meat grinder” (that’s what it is). The solid financial background here does not mean that you must be a millionaire or must own houses and cars to be able to trade forex.
I mean if you still have a debt to pay (never let yourself owe others, especially money. Repay as soon as possible) or you have a family with bills to take care of, don’t participate in forex trading. Ignore the perspectives that they (who are usually brokers or instructors who want you to make money for them) say. The rate of people (actually) succeeding with forex is very, very low.
You can trade very well with the demo account but never put (almost) all your eggs in one Forex basket. Perhaps you are just having luck as people often say “gambling treats newbies” only. In forex trading (or stock, gambling), luck comes and goes very quickly. And to become a successful trader, you can’t rely on luck.
You should always feel comfortable (mentally, physically, financially, etc.) when trading forex. Absolutely do not borrow money to trade forex, stocks. Do not sink deeper into the mud.
I need to increase my Forex account balance quickly, as quickly as possible
No, you don’t need that. What you need is to trade properly and methodically. It may take about 5 years for your forex account balance to reach your desired number. But if you “dare” to try to accelerate the process, you only push yourself further and further away from the destination.
Most people come to forex trading because they want to make money fast. Therefore they trade a lot, open orders with a large volume (compared to their balance). And then what, they burn out their accounts very quickly, sometimes with just one order without a stop-loss.
There is advice for you as follows: “Don’t increase the volume of your orders until you have doubled or even tripled your balance. Most people make the mistake of increasing the order volume too early when they get some positive initial results. It is the highway that takes you back to the old pig trough.”
I will trade with discipline and patience AFTER I increase the amount in my Forex account
I know a lot of new people and people who are “stuck” in making money in the market thinking that they will keep that hard part (discipline and patience) for later. That is after they earn a certain amount of money.
In fact, it is their greed and hope, the two most dangerous emotions in trading. This way of thinking leads to only one path that is losing and quickly losing money.
Usually, they will never trade with discipline and patience. Just like you say this week you’re going to eat healthily, stop smoking, and go to the gym every day.
Do it RIGHT NOW if you know and understand that they are necessary and required. There is never a shortcut in trading or like most other things in life. The more proactively you start working on the most difficult parts, the faster you will solve the problem.
Get rid of the short-term “temptations” in trading. Focus on long-term stuff and be patient with it.
The more orders I open on the market, the more chances of making money I have
I, like so many others, had such belief in the early days of babbling in the forex market. Excessive trading is probably the most common mistake made by individual traders. They don’t even know it is a problem.
I always advise you to be patient and disciplined to wait for REALLY GOOD AND CLEAR opportunities. Thinking about the dealer in gambling, I know that most of them play and only play when they ensure the win in their hand (with tricks, cheats, tricking tools, etc.). Let’s “play” like the dealer. “I will only open orders with high certainty, or else I will just watch. Sometimes, I don’t place any orders for a whole month. Don’t ever think about taking my money away.”
The market always offers everyone equal opportunities. Your job is to look for REALLY worthwhile opportunities to risk your hard-earned money or to stay on the sidelines with unclear opportunities. You need to get rid of the idea that more opportunities mean more money.
How many above “beliefs” do you have? Please share your trades. We are living on the internet. No one will know who you are.
So feel free to share together to improve. We always learn a lot from the mistakes and experiences of others.