It is likely that if you are a courageous person, you have lost your entire forex trading account before you started to show an interest in learning information about trading forex from books and tutorials on the Internet. But why did you fail the first time? This is an article about forex, but if instead of trading forex you were driving a car, would you, in the same way be so irresponsible? Would you allow an accident to happen? Reckless driving puts one or more human lives at risk. In forex, we only risk money, and when we enter a trade, we are unsure about the direction the market is going to take. It is perfectly acceptable to, at least in the beginning, fail more often at trading forex than driving a car. And most people do just that. We allow ourselves to fail at trading forex because we don't understand what we are risking. This kind of knowledge will only come to us with experience.
When we are driving a car, it is obvious that one or more human lives are at risk, if a small one, because the car makers produce cars that are very safe these days. Had we known what it is we are risking when we are trading forex, maybe we would be a little more concerned about it! When we drive, it is obvious because from an early age we have understood the importance of human life. But who will tell us what those important things are, in forex? Is it not the first time we hear about it for a few months, or even a year? Will we learn that knowledge from books? Internet forums or blogs? Or will we learn it from our own experience?
When going out for a drive to see a friends' new house for the first time, you can get lost only so many times by taking the wrong exit. As long as it is the same exit. Once you are more familiar with the area, you will not even take the wrong exit at any time in the future, because you will be familiar with it. Why then, when trading forex do we take the wrong exit so many times, and repeating the same mistake over and over again?
This may be because when we start trading forex, our imagination is at its best. We think it is easy to trade and make money and we are pretty excited about it. But with a little research we learn that one of the no-no's of forex trading is to base our trading decisions on emotion. Perhaps we have had a few positive trades, continued doing the same things in excitement, but then the market gods turned their back on us and we lost what we gained in 10 trades, with just 1. If you begin to understand the reasons for why this happened, you will be making your first step on your way to becoming a profitable forex trader. This information is necessary, and I will try my best to cover some of the most important subjects in this article.
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