5 Reasons You Won’t Make Money Trading Crypto or ForexKehinde LAWAL
Trading the financial market can be very profitable if you have the right mindset and knowledge. It is never a get rich quick scheme. I have been trading Cryptocurrency and Forex for the past 3 years and 1 year respectively. And in this post, I will share with you 5 reasons you won’t make any money trading Crypto or Forex. The first reason will shock you.
Why you won’t make money trading Crypto or Forex.
1. Your Broker(Trading Platform).
Yes, this is perhaps one of the major reasons why most people fail in trading the financial market. The truth is that your broker can kill your account in many ways, and one this way is through fees like high spread and commissions.
You see, some brokers are like middlemen to the real brokers. They charge very high fees that it’s so damn costly to get in and out of a position. To understand what I’m saying check the below picture of broker A charging high spread and broker B charging a low spread. Which would you rather go for?🤔
Another way that your broker secretly kill your trading is by having many downtime periods. I’m sure you’re wondering, how does that affect me? It’s quite simple. You see, during times that the market is very volatile, some brokers do have downtime on their platforms. This usually delays you from taking any profit you make, and if God so does it that their website gets back running, your trade may eventually be at a loss. All these reasons sum up to the fact that you need to find a good broker.
2. Self Doubt
I think this a very funny reason why some people never succeed in trading the financial market. They simply don’t believe in themselves that they can make it as a trader. Besides, they don’t have the patience to follow through. And after a few losses, they give up.
The same people are always on the lookout for tips and predictions from other traders. They refuse to understand that no trade is 100% certain and that you can never be among the 10% successful traders by doing what everybody is doing.
3. Lack of Self Awareness
In my own opinion, self-awareness simply means understanding yourself. Knowing what you like about trading, knowing why you’re trading, knowing which market you can thrive in, etc.
I feel many newbie traders don’t know what they want? They don’t even know why they’re trading? You need all this so that you can tailor down a good trading strategy that works well for you. You shouldn’t just copy others blinding. Why become a day trader when you’re always at your day job when the market is open. You just have to understand yourself so much that you figure out what will work for you.
I like commodities and digital assets, and that’s why I only trade Bitcoin, Altcoins, and Gold. I rarely even touch currency pairs like EURO/USD. You just have to know yourself because as Ed Seykota once said, “Good traders won’t follow rules for long, except if it reflects their trading styles.”
4. Not having a plan
The great investor, Warren Buffet once said, “An idiot with a plan can beat a wise man without a plan.” This is very true. Not having a plan already puts you among the losing traders. It is like signing a contract with distraction, you will always be confused and easily carried away by market action, which most times will be false.
So what are the things you need to plan? Plan your:
- Setup: The things you need as confirmation for placing a trade.
- Entry: when you enter the trade
- Position sizing: how many percents of your capital do you use on a trade. Never use all your capital on a single trade. Nothing is certain.
- Stop Loss: if the trade goes against you, where do you cut your loss.
- Take Profit(TO): If the trade goes your way, where do you take your profit.
5. Not trading your plan:
Lastly, this has to do with trade management. Whether you manage your trade based on your plan or based on your emotion. You see, many people dump their plans and leave their trading results to randomness. And I must tell you, the result is usually fatal.
One advice about trading your plan: You’ve got to be very disciplined. And the best way to do this is by doing things you don’t like every day e.g. Jogging, Running, Going to the gym, swimming in cold water, etc. If you can’t do this hard stuff, then it will be hard to follow written rules that you have put down yourself.
The bottom line of this article is that you can become a successful trader if and only if you; find a good broker, never doubt yourself, have self-awareness, plan your trade and finally trade your plan. All this will give you insights into what works, and once you figure it out, you should double down on it.
I hope you found this post useful. Kindly comment down below what you’ve learned, and share this post with anyone who you think could benefit.
Until next time, keep learning my friend!