Why do you trade in financial markets? Let me guess! Because you want to make a lot of money and buy whatever you want with it!
This is a perfectly acceptable reason, but it will most likely lead you to greed and ultimately ruin your trading account. Instead, you may want to take your money to Las Vegas and gamble on it!
The worst stimulus for trading is greed. The market always punishes greed and instead rewards moderates.
There is a narrow line between traders and gamblers. Whenever it comes to real money, there are those who blindly try their luck. If you want to be consistently profitable, don’t think like an open gambler, don’t blindly enter into a deal, and don’t just rely on luck.
As a trader, you need to know that anything can happen in the marketplace. Unless you accept this fact, you will not be able to make a lasting profit. I know this idea sounds very silly! How can you, as a trader, consistently benefit from a market that has random results ?! It is impossible! You are wrong! In trading and living, we have what we call probabilities.
Casinos are profitable every year, even though they run a business that is the result of every card that falls on the table, every mistake that rolls, and… is unknown and accidental every time! Isn’t that weird? Business based on chance but permanent income!
They have understood the concept of probabilities and have created games that increase their chances. While it’s true that people are lucky and win and get out of the casino with millions of dollars, casinos know that if they have enough and big examples, more losers will be attracted and those losers. There are more than the winners.
Take baccarat, for example. A popular game among gamblers is very simple. The cards are split between the banker and a player, and all you have to do is bet on each one. Since you have the same access to both the banker and the player, it seems that your chances of winning are basically 50%, but in reality this is not the case!
By twisting the rules, such as low commission costs or reduced payments when the banker wins, the situation is very mild in favor of the casino. This may be a very small profit, from 1 to 5 percent, but that’s enough for the casino to make a big profit by playing the right number of games.
You need to keep in mind that the difference between gambling and trading is that you can adjust the situation in your favor. This is why your mindset should be the same as that of a casino owner, not an open gambler.
For continuous profit, you have to trade like a casino and look for more than one result. How? I will explain to you below:
You need to learn market behaviors, patterns, and market trends that will happen in the future, and that will give you the opportunity to trade. This is possible by examining price movements and paying attention to support and resistance, indicators and economic events, and so on. Record your observations and make figures that you can follow in different steps or patterns.
This is where having a trading journal comes into play. Using the journal, you can focus on situations that are more likely to win and identify losing positions.
You also need a steel risk management. You can set a long-term success slope in your direction, if you get used to managing your risk in transactions.
The more optimal the risk-to-Ricard ratio, the less sensitive you are to the win in each transaction. For example, if you find that you have been good at identifying twin roofs and trading them, then you need to design a strategy that will give more value to twin roof rafters. If you can have enough of these trades and the winnings are more than the losses, you will be profitable in the long run.
The last thing that matters is that you can use the analysis of other traders. The Internet is full of economic and technical analysis. With the opinions of others, you can be sure that you will not fall into the trap of prejudice.
Of course, there are other ways. But you should always keep in mind that you don’t have to know exactly where the market is going, you just need to know where the price is likely to go and make the most of it whenever the forecast is correct.
Published and authored by FalconProfit.com
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