The cold truth about trading the financial markets is that what you’re made to believe is often not as important as you think. Usually the most important parts of the deal are rarely discussed in depth and simply seem to “melt” into the background of the conversation.
Remember, in this industry, in a good year, 5-10% of those who try to trade with real money are actually profitable at the end of the year. Professional traders make most of that money and they are your competitors. Therefore, they will not go out of their way to make sure everyone knows about the realities of trading and the most important skills and issues they should focus on to further their trading career.
The reality of market trading is that almost all of it is deceptive and in some way counterintuitive or contrarian. I liken trading to the greatest chess game ever invented. You will be competing against all other traders, including yourself, who can be the toughest of them all.
In this lesson, after most individual traders have already blown a number of their accounts and are completely broken mentally and financially and out of the business for good, they will discover only when it’s too late that they’re out of business. We will discuss some of the most deceptive aspects.
How can you avoid being fooled by the market…
The issues discussed below are things you don’t think much about when you first start trading. These are usually discovered a year or two after he started real money trading and suffered losses that most people would rather not admit.
So today’s lesson is just a quick track down of your knowledge years down the line by filling in the blanks and giving you some puzzle pieces you haven’t realized you’re still missing. It is my intention to warn and educate you on how to overcome these issues so that they do not ruin your trading career.
My own experience of over 18 years of real money trading in the global financial markets has taught me so many lessons. I don’t have all the answers, and certainly no silver bullet for successful trading. However, I have been able to gain some very powerful insights through my trading career. One of the most important things to recognize and overcome as a novice trader is the deceptive nature of trading and the industry that surrounds it.
The following points combine some of the most deceptive aspects of trading with some solutions to help you avoid falling prey to them, thereby speeding up your trading journey…
It’s easy to get in, but hard to get out.
Many traders, not just beginners, tend to focus too much on trade entry and try to find some “magic” trading system or mechanical trading software that can print money on autopilot. It’s not all your fault either. The trading industry definitely pushes trade entry and “systems” over the more important aspects of trading: trade exit (because that’s what you sell and what gets people to trade), money management and psychology. . In fact, closing a trade properly is much more difficult than entering it, so most of your attention should be focused there.
Note that when I say “trade exit” I’m referring to everything that surrounds a trade exit. Stop loss, position size, risk reward, support and resistance levels, average true range and more. There are many factors to consider when planning a trade exit, but for most traders it seems like a mere speculation.
- How not to be fooled by this
One of the reasons traders are so easily fooled by this entry/exit issue is that all that is really being discussed and sold online etc. is trading entry systems that simply do not emphasize the importance of exits. is.
As I pointed out in my article Random Entry and Risk Reward Case Study, with proper money management and risk reward (trade exit) traders can actually make a profit even with a completely random entry system. increase. This does not mean that the entry is unimportant. This is because combining high-probability entry methods with proper trading exits can improve trading performance far beyond just random entry methods. The point is that the exit system is much more important than the entrance system you use. So keep this in mind when you surf the net and read tons of different trading blogs. My Advanced Trading Course has multiple sections dedicated to the topics of Money Management, Risk Reward and Trade Exit.
I hope after reading this you start thinking about trading exits as much or even more than trading entries. Because, contrary to popular opinion, money is made or lost by exiting a trade, not by entering a trade.
Funding an account is easy, building an account is hard, and withdrawing profits is harder.
The trading industry, such as brokers, makes it easy to fund your trading account, but places little emphasis on how you actually make money, believing that you should regularly withdraw a portion of your profits. You have to remember that no one but you (and me) really cares about you making money as a trader.
As a trader, your goal is always to make money so that you can withdraw and actually spend (or save) it. The point of trading is not just to churn and lose to keep the broker’s pocket watering. When you visit a broker’s website, you may hear about the good side and potential benefits, but you rarely read about the bad side or risks other than the finely printed disclaimer at the bottom.
Brokers and market makers understand that the market is essentially a casino for traders. The same temptations and emotional reactions apply. So it’s not in their best interest to paint you a picture of reality, they want to paint a quick and easy money-making picture. News, prices flashing on screen, and charts zig-zagging up and down are like constant dopamine ‘calibrations’ for traders. In other words, being fooled by it can easily lead to a dangerous addiction. For you, this is very beneficial for the trading industry as a whole. Not so much.
Although rare, some unscrupulous brokers (often offshore or unregulated) can work against you by making improper pricing or execution or making withdrawals difficult. There is a nature. I don’t mean market makers (not all bad as people believe), just bad people who have no responsibility or ethics and run a bad brokerage firm. I’m talking about So choose a decent broker that is well regulated and people can vouch for. For those interested, I am currently trading using this broker platform.
- How to avoid deception
You need to be a defensive trader, not an aggressive trader. Your goal is to keep your money, not trade (and lose) as much as possible. Most traders start out with a very aggressive mindset, whether they admit it or not.
Building your account slowly and approaching your trades with the goal of preserving your trading capital greatly increases your chances of making a profit in the long run.
Always remember that no one cares more about your money than you. Don’t believe the hype. Not all deals are “sun and rainbow”. I don’t mean to be negative at all. We try to be real so that you can understand, know and learn from the truth.
Once you have earned a certain amount of money trading, you should promise to withdraw a portion of it, say 50% of the profits, for each money. There are many reasons why you might want to do this. For example, not only to keep that money from escaping to the market, but also to make it more realistic than just numbers on a screen when withdrawing. .
There are no shortcuts to trading success
Perhaps the most perverse and pervasive issue of being duped by the trading industry about “shortcuts” and “quick money” to trading success is perhaps the most pervasive of all the other issues covered in this article.
I don’t mean to sound like a pessimist, but the truth about trading is very different from what is portrayed in popular financial media and most online trading educational sources. Hey, don’t shoot the messenger. I’m just trying to spread the word so that you don’t get caught up in a pile of his 90% traders losing money over time.
The mental image of the New York penthouse-dwelling, Lambo-riding, slick Wall Street trader fills the minds of many novice traders who are lured into trading for the first time by “powers.” It’s good to have goals, even lofty ones, but you have to stay grounded in the reality of what it takes to reach them. Trading is, at best, a slow, get-rich-quick game, and the more you try to make the “faster money,” the more you struggle and ultimately lose. I’ve written about this in detail in other lessons, so I won’t cover all the “why”s in this lesson. However, keep in mind that there are no shortcuts to trading success. This is a long game, and if you want your chances of consistent success, you need to be in it for the right reasons and commit to good trading practices.
Besides the biggest piece of advice I always give my students (keep your charts clean, keep everything simple), the other biggest piece of advice that is as close to the shortcut as possible is to accelerate learning and empower yourself through teaching. improve rapidly. Whether it’s on this blog or my course or another course, mentors help speed your progress, but they’ll never hand you a franchise to go print money and Anyone who says they can give this is lying. I want your money Find a trusted and honest mentor who doesn’t misrepresent the realities of trading. Use common sense when doing this.
Conclusion…
Unfortunately trading fraud is very real and can have a huge negative impact on your trading if you are not aware of it. The trade industry and even actual trade practices, whether direct or indirect, are highly deceptive. What you think is right is often wrong. Also, what you think you should focus on is often the least important thing. It’s a combination of what the industry is trying to do to fail and simply how difficult it is to master the trade.
This is why I wrote today’s lesson to help you understand the deceptive nature of trading and give you insight on how to overcome it. Aside from the points discussed above, the biggest thing to remember as a retail trader is to beat the ‘competition’ slowly and steadily. Trading is more like a marathon than a sprint to the finish line and you need to properly prepare for it. Just like long-distance runners, you need to run at your own pace. If you run out of money right after entering school, you won’t be able to stay long enough to reach the ‘finish line’.
I have been trading live financial markets for 18 years. I think I’ve learned a few things along the way. I also feel it is my duty to share my views and experiences with you to help you succeed. My trading course aims to prepare you for the “battle” of the market. So, when you start live trading, you become more like a soldier in armor with solid strategy and effective “weapons” instead of going to “war”. Like most traders, trade completely unprepared and unaware of its deceptive nature.
Please leave a comment… I would love to hear your feedback on what you have learned along the way to help other inexperienced traders. As a trader, what deceptions and deceptions have affected you so far? What did you learn and how did you overcome them?
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