The secrets of trading and investing no one is willing to share
In this article we have decided to take the position of educating you about the not so pretty details of trading and investing in the financial market.
The secrets of trading and investing no one is willing to share
There are certain parts of trading and investing in the financial market people don't freely share with others. Most people don't share or discuss the not so pretty details of forex, futures, and stock trading, especially if it messes with their own source of money. People who are trying to sell you expensive trading and investing systems, some brokers, and anyone that enjoys and makes money off your cluelessness will be reluctant to tell you the truth.
We, as an online trading academy and licensed investment consultancy, have decided to take the position of educating you about the ugly realities of trading and investing in the financial market. We would be sharing with you things no one ever sat down to tell us. These are facts we learned through trial and error, and we would be sharing them with you in the hope that we can help make your own journey smoother and less traumatizing.
You don't need to be a genius to be a consistently profitable forex, futures, and stock trader
There is a particular stereotype a lot of people have about consistently profitable forex, futures, and stock traders. Most people assume that successful traders and investors are usually some kind of geniuses with a super brain and crazy mathematical abilities. But this is not just inaccurate; it is also not accurate in any way. Quite many traders and investors either did not attend university at all or never finished. The skills involved in becoming a successful trader and investor are not taught in school. Becoming a successful trader and investor, in reality, has more to do with psychological abilities and practical skills rather than technical number-related skills.
You need not have a college degree or understand calculus to become a consistently profitable forex, futures, and stock trader. What you need is to be disciplined, patient, and a mentor who helps you to develop your Supply and Demand trading strategy. Therefore, do not get confused or overwhelmed with all the fancy looking trading systems or indicators that look like calculations only Einstein would understand. What you need to have, however, is a high level of emotional intelligence, a great deal of self-control to withstand constant temptation, and professional guidance to master your Supply and Demand trading strategy. Mathematics or Economics are not needed to become a successful trader and investor.
No one is born with unique trading and investing skills
It is true that certain groups of people might be naturally better at trading and investing in the financial market than others, but it is also a fact that the mindset and psychological ability we need to become successful forex, futures, and stock traders are not genetically controlled. If anything, as humans, we naturally suck at trading and investing. Certain parts of our brain are naturally more developed than others. Evolution has a significant role to play in how our brain functions have evolved over time, and the fight-or-flight areas are more developed than the others. Our more advanced brain functions haven't enjoyed equal development, and these are the areas you need to become a consistently profitable forex, futures, and stock trader.
When our money is on the line, we basically shift back to the caveman mindset. When we lose money, it feels like some animal has decided to threaten our entire existence by stealing the food we have really worked hard to get. We start thinking of how we would starve if we don't get our food back or find another food immediately. In trading and investing, when we lose money and we switch to the caveman mood of wanting to get it back immediately, this is when we begin to make emotional decisions.
Fast forward to this century, we are now using technologies that have only been available for about half of a century, and while trading and investing, we are required to use aspects of our brain that haven't had an equal chance at developing through evolution. As we begin to trade and invest, the brain is sending signals, and we are interpreting it as cavemen would. The feeling that an animal is about to take away our food can be equated to the feeling we get when we feel we are about to lose our hard-earned money in the trading arena.
We jump back into the trading arena after losing a forex, futures, or stock trade because we think we are hunting for other food immediately. To be a consistently profitable forex, futures, and stock trader, we have to make use of our prefrontal brain cortex, which has better logical control and can deal with temptation better as compared to the fight-or-flight area. The primary lesson you need to pick here is that you can't just jump into the market with the plan to "swing" it without any real trading plan or Supply and Demand trading strategy. If you trade and invest like this, you are definitely trading from your fight-or-flight brain area as against the prefrontal cortex, which takes more effort and training to use.
Experienced and mature traders and investors don't think in terms of percentage returns
Percentage return is not really of much importance in trading and investing, as you might think. If a person says they made 100% returns on their account within the year, what exactly does that mean in the actual sense of things? The relevance of the percentage is not significant because 100% returns could mean a novice trader was able to double his initial 300$ by luck, but it could also mean a professional trader and investor was disciplined enough to follow his Supply and Demand trading strategy through and was able to double his account at the end of the year.
The main point is that the percentage doesn't really matter because it is relative to interpretation, and it depends on too many variables. Professional traders and investors are usually isolated and do not have a board of directors to report to. Consistently profitable forex, futures, and stock traders are trading every month, and they probably remove out of their profit consistently. Professional traders and investors don't track their accounts by a percentage because it would definitely fluctuate from month to month, depending on profit accumulated and losses incurred.
The most crucial Key Performance Indicator in trading and investing is the overall average risk to reward ratio. You evaluate yourself based on how much you risked and how much you get back in terms of reward. Consistently profitable forex, futures, and stock traders are always measuring the success of their trades in terms of how much money was risked, and how much was made back.
You don't need to be right to be a consistently profitable forex, futures, and stock trader
It is perfectly natural to want to have a high number of winning trades. Apart from the fact that we make money from it, it also gives us a sense of confidence that we were right about the market direction. As much as the feeling is natural, it is not significant in determining your profitability. Being continuously correct and having a high percentage of winning trades is not necessary for making money consistently from the financial market. The idea of being right or wrong is a familiar one for most people.
A lot of times, we have an inherent need to be continuously right, and even when we are wrong, we most times try to rationalize why we made the wrong decision. Most people do not like being told they are wrong because they tend to process that information as something being wrong with them or that they are inferior in some way. This becomes an issue as a forex, futures, and stock trader because we have to get comfortable with being wrong sometimes about the direction of the market and taking certain losses along the way.
Being right about the market direction does not usually have an impact on your overall success or failure as a trader and investor. We will like to illustrate to you that you can still be very much profitable in a situation where you are wrong more often than right about the market direction. The most crucial part is that we need to be able to distance ourselves from the need or compulsion to be right about every forex, futures, and stock trade. To prove to you that you do not necessarily need to worry yourself about being right always, let's discuss the risk to reward ratio.
When you educate yourself enough about the risk to reward ratio, and you begin to understand its potency, you would realize that being right is not a necessary requirement for you to be a consistently profitable forex, futures, and stock trader. If you examine the hypothetical example below, you'll come to see the potential of risk to reward ratio. If you keep your risk (R) consistent, you can obtain a reward of 2R or even more on your winning trades, and you'll still be able to make a substantial profit even if you are wrong on a lot of trades.
For quite several traders and investors, being wrong and still making money is not something constantly thought about. Most traders and investors believe they are right about a forex, futures, and stock trade when they enter it and would like to think their analysis was actually right. So, we always set ourselves up to believe we are right about trades and expect to win. However, this is not a realistic expectation because the fact is that we will undoubtedly lose some trades. We need to prepare our minds for the losses ahead to avoid getting emotional when such happens. The way to deal with such situations is to prepare yourself for the losses before it happens mentally, and you also need to realize that being right is not equivalent to making money in the financial market. You also need to ensure you do not take it personally when you lose a trade, and it shouldn't affect your confidence. If you take an average of 20 trades, you'll definitely have some losses, and if you ensure to follow your Supply and Demand trading strategy and maintain your risk level, you'll be more than fine at the end.
For example, if you have a 30% to 40%-win rate on 20 trades and your trading account can still experience a significant percentage increase, that is a good thing since 20 trades can be over a period of 3 to 4 months. If you have a more substantial account, you would be able to make more with just a 30% to 40%-win rate if you keep your losses at 1R while your winning trades hit as high as 3R, 4R, or even more. Even if you are not right every time, you can still make a large amount of profit on a more significant account.
We do not want you to feel discouraged or defeated in any way if you have a small trading account. Also, ensure you don't overtrade or over-leverage your account because you think you can make fast money that way. You should come to a point where you understand that if you follow a consistent trading plan, keep your risk at your level of tolerance, and only trade low risk, high reward, and high probability Supply and Demand setups, you can be sure would come out profitable over time. If you want to know more about risk to reward ratio, please read this article here
Becoming a consistently profitable forex, futures and stock trader will not happen overnight
You are most likely not going to be hearing this from anyone trying to sell you some magic pill. The mainstream trading and investing media want you thinking trading and investing is effortless and that in no time you will be making enough money to sustain yourself fulltime and live lavishly, which is not true at all. We, as an online trading academy are not trying to discourage you or say that you can't make money in the financial market because that would be untrue. We have trained professional traders and investors who are consistently making money in the financial market, and so are we. However, it takes a lot of commitment and hours of practice to navigate that journey successfully and get to that point. They were willing to put in the work to fix their trading problems, which involves changing any mindset hindering you from making money in the forex, futures, and stock market.
We believe anyone can become a consistently profitable forex, futures, and stock trader once they have the right guidance and attitude towards it. You must be disciplined and committed enough to trade and invest only when your trading edge is undeniable and keep your risk constant. For most traders and investors, following the trading rules above is almost close to impossible. Trading and investing in the forex, futures, and stock market is not suitable for everyone because it comes with a high level of uncertainty. Making money this month does not necessarily mean you will the next month, and some people cannot deal with this level of uncertainty. Some traders and investors try to deal with the uncertainty by setting monthly goals, but the financial market comes with a lot of unpredictability. All you can do is trade and invest to the best of your ability and follow your trading plan through. Some months you might make much profit, and some you might breakeven or lose even as a professional trader and investor.
Consistently profitable forex, futures, and stock trading is not an entertainment
Most people probably won't tell you this, but being a consistently profitable forex, futures, and stock trader is not all sunshine and fun. The mainstream media perceives a successful and profitable trading life as something entertaining or exciting, which is not totally accurate. It takes a lot of sacrifice and discipline to be a consistently profitable forex, futures, and stock trader, and this also comes with a lot of balance.
The plus side to starting out as a disciplined trader and investor is that you can safely avoid all the alternating low and high points that most beginners experience when blowing away their trading account. We, as an online trading academy, are not trying to imply that being a professional trader and investor is boring, and we are merely saying it should be something you treat like a job or a business, not a plaything. Trading and investing in the financial market should not be something that gets you emotionally stressed or gets your adrenaline pumping if you have the correct mindset. Once you can get to a point where you have successfully eliminated emotions from your trading, then you are on the right path to success.
Desperation makes it harder to make money in the financial market
The best explanation why many traders and investors lose money over the long run in the financial market is because the more desperate traders get in the financial market, the more reckless they are with their trading plan. One fact you need to understand early is that if you ever lose money in the financial market, then it is solely and entirely your fault. You cannot shift that blame on anyone else. Also, your only competition in the trading arena is you and your mental capacity, not anyone else.
Most people begin forex, futures, and stock trading because they are trying to find an easy way out. They think it's an easy way to make money and live in a dream world. However, this is not reality, and reality is a lot more different. It is okay to be passionate about forex, futures, and stock trading, but it is not okay to let your emotions run wild when making trading decisions. When you get overly excited about a trade or investment, you get emotional about it and illogical. You begin to lose the patience to wait for your trading account to grow, and you want it done instantly. This excitement can force you to risk too much and trade excessively, which will only cause you to lose money due to carelessness.
Rather than waiting for low risk, high reward, and high probability trade setups and being patient, trying to force your way and take unnecessary risks would be counter-intuitive. You need to understand that you will not get low risk, high reward, and high probability trade setups every day and every week and be willing to live with that. The secret in becoming a consistently profitable forex, futures, and stock trader lies in your ability to know when to act and when to keep still. Professional traders and investors also realize it is better not to take action when in doubt.
You will definitely make more money by trading and investing less frequently, and over time, you will be able to develop and train yourself better to identify better trade setups that fit into the predetermined criteria of your Supply and Demand trading strategy. However, you will not master this skill overnight, and until then, you need to understand how to take necessary precautions by not entering forex, futures, and stock trades if you have any doubt or fear about it.
You have zero need for fancy software and trading screen setups
Here is a truth that most trading websites will never tell you, because most times, it messes with their business. You have absolutely no need for fancy software or trading screens. We are professional traders and investors, and we basically use our personal laptops most times, especially when we are traveling, and we actually do travel a lot.
The most essential and useful gadget you will ever need as a forex, futures, and stock trader is your brain and mentor. If you are dedicated enough to conquer your compulsions and mental errors that cause you to lose money, then you are more than halfway on your way to making money consistently in the trading arena.
If you combine a high level of self-discipline with an effective trading strategy like Supply and Demand, you will have all the tools you need to succeed as a trader and investor. We, as an online trading academy and licensed investment consultancy, can teach you the Supply and Demand trading strategy in our virtual classroom. All you need to do is to apply and enroll to our lifetime program.