Research has shown that the initial success for new forex traders is not only disturbingly low but is also quite rare to say the least. Even though this tends to change and improve after some time, for many new forex traders, this tends to be a tad too late. This is usually because after posting a series of losses, many traders tend to give up, strongly believing that maybe forex trading is either too complex or is just not for them. This should not be always the case, it is highly recommended that one gets some basic training about forex trading before going live, here are further reasons why this should be the case;
You Lack the requisite experience
It is worth noting that financial trading just like any other new initiative does have a learning curve. But unlike other ventures such as learning how to drive or play a new game, you are not risking a substantial amount of money in the process of learning the rules of the game. Attempting to learn about the currency markets and the inherent trading principles solely on a trial and error basis is not one of the most recommended approaches to gaining the requisite skills required to make you a successful trader in the forex market space.
Even though many forex brokers tend to offer a practice version of their trading platform which offers exact experience as any other live trading application, it is still important to get further training on the same. The Academy of Financial Trading is one good place to get well detailed training materials for further training and valuable insights from tested advanced strategies.
Proper training helps you come up with a sound trading plan
Nowhere is the tenet of if you don’t plan then you plan to fail so true and real than in the financial trading market segment. One of the most common mistakes by new traders is the lack of a sound, reasonable and workable forex trading plan. Proper training will teach you the basics of coming up with a plan such as coming up with an overall objective for all trading activities and also encompassing a plan for each and every trade you resort to make. Your plan should include the different currencies you intend to deal in, the amount of time you intend to devote on each trade and the amount of leverage you will use. Your trading plan should also include a realistic rate of return and an exit strategy for each trade you get involved in.
Training teaches you the importance of including take profit and stop loss instructions
What many new investors fail to appreciate that is when you place any market order and then go ahead and leave it open; basically entering a trade at the market price without leaving instructions to close that particular order does have the effect of gambling with the total value of your account. Proper training will educate you on the need to always consider adding what is known as stop loss instructions to virtually all open positions you may have. You should also consider leaving take profit orders which allow you to establish the exact rate at which you will lock in your profits.
Training teaches you not to hold on losing positions for too long
One the key differences between a well-seasoned forex trader from a new and inexperienced trader is the ability to clearly determine when a losing trade will not reverse its trend. Rather than opt for the easy route of holding and hoping; a seasoned and disciplined trader will be able to take the loss much faster, count their losses and make plans for their next move. As a matter of fact, this one major reason why you should include effective and efficient stops on all your trades; this allows you to limit your loss making streak without necessarily wasting too much time or resources on a dead trade at any given time. With a good and well thought out forex trading plan, most of these problems can be easily addressed and dealt with effectively.
Training helps you manage unreasonable expectations
Unfortunately, many new traders are usually sucked in by the get rich quick charade still being perpetrated by some forex brokers. This mentality, unless properly managed can and does lead to devastating losses. The fact of the matter is that it takes years of experience to gain the required insight to enable you turn forex trading into a successful and full time occupation. Proper training will help you stay in the game long enough and help you evade the all too common problem of losing all your money within a very short span of time. Training materials from Academy of Financial Trading will go a long way in bridging this gap and help you manage your expectations accordingly.