In trading, as in most walks of life, having the right attitude and approach is often more valuable than having the technical aspects in place. Everyone knows that you can be loaded with qualifications and still be a social misfit. It is also a known fact that many successful entrepreneurs left school at age whatever with no qualifications at all.
Many traders start out by experimenting with demo accounts, using virtual money to speculate on the markets and quickly decide that it is easy to rake in huge profits, before going on to the real thing and being completely wiped out. The fact is that reactions and perceptions are completely different when you are using your own ‘real money’ than when you are playing a realistic game, but a game nonetheless. Panic can set in if the trade moves against you fast and it is your hard earned cash on the line.
Risk is the essence of successful trading, but it must be calculated risk and there are numerous safety nets, such as predetermined stop loss that can be strategically target to prevent a meltdown leaving you with no money and a pile of valueless stock. It is common sense to only risk what you can afford to lose.
Your attitude towards losses is also important and if managed properly should be regarded as nothing more than ongoing expenses. Everyone suffers them, but new traders are often crushed by their first experience. Be realistic, they have to be factored in and taken on the chin.
With a common sense approach and some sensible safeguards in place, trading can be a success.
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