4 Telltale Signs You’re Behaving Like a Rookie Forex Trader

If you are not yet making the untold riches you may have once dreamed of – or at the very least – are not yet consistently profitably then read on. In this article, you will discover the key differences in mindset which separate the loss-making rookies and the seasoned professional.  But perhaps most importantly, you will learn how you could reverse your fortunes by simply mimicking the pros.

Rookie Forex Trader Misconception #1: “Trading = easy and fast cash”

The rookie will often find themselves on a white-knuckle journey as they attempt to trade the markets, often in a desperate plea to make as much money in the shortest amount of time possible…but this will often come with dire consequences. Not only will their expectations of what they can quickly make from the market differ enormously from the realms of what can realistically be achieved, they will often have an insatiable appetite for obtaining that quick buck.

In comparison, the experienced trader will hold a longer-term horizon and will happily play “the long game”. They will accept that it is far more desirable to make small yet consistent gains over a longer period of time rather than to have wild fluctuations in their equity curve. They will measure their success in percentage gain or loss, rather than in monetary terms or by simply counting how many pips they made.

Reassuringly though, many of the battle-scarred seasoned market professionals have made many rookie errors in their time yet simply attribute them down to the school of hard knocks. What separates them from many vast majority who simply give up and walk away is an unwavering determination and ambition to succeed.

Rookie Forex Trader Misconception #2: “I’m missing out if I’m not in the market”

The rookie will typically entertain the idea that more equals more when it comes to financial markets trading; that the more trades placed and the longer they are in the markets for will simply lead to greater profits. You could say they are fearful of missing out. However, this will typically serve as a false economy. Not only will this mentality cause the rookie trader to deviate away from their strategy (supposing they even have one!), it will expose them to unnecessary intra-day noise which will be detrimental to their trading account.

To the professional trader, less will mean more…and more will mean less! The will welcome the opportunity to relax and stay out of the market as an opportunity to simply preserve their capital. If the rules of their strategy are not met – they will simply stay out, rather than fret over what they could be missing out on.

Rookie Forex Trader Misconception #3: “I have a feeling…”

The rookie will typically blindly jump into the market without a plan. By doing this, they would have unwittingly have planned to fail!  But in a market where anything can happen at any time, the rookie and their slapdash approach will serve as no than fresh meat for the market to devour before spitting out.  Without a plan, strategy or even a willingness to learn, the odds will be well and truly stacked against the rookie.

The experienced professionals will have a very set idea of what to trade and when to trade it. They will have a very specific set of rules and every possible outcome will be assessed before taking a trade set-up. They will typically have rules for entry, rules for exiting the trade as well as strict risk parameters. Mention this to many-a-rookie and they will consider such essential requirements as a mere inconvenience.

Rookie Forex Trader Misconception #4:  “More market knowledge = more success as a trader”

The amateur forex trader will kid themselves into thinking that the more books they read and the more strategies they learn, the more prosperous their trading career will be. This is a fool’s paradise as the sheer volume of information will almost certainly cloud judgement with conflicting information which will cause the rookie to digress into crippling state of “analysis paralysis”.

The more seasoned trader will have had the benefit of experience and will have a very fixed view of the market and how their strategy fits both for them and within the market. Sure, it’s likely they will have tried many strategies and systems throughout their trading career but this will have propelled their current choice. They will typically like to keep things as simple as possible, embracing the “less is more” philosophy.

Conclusion

Ever heard the cliché: “To create is effort, to copy is genius?” It’s one that makes sense in many facets of life – not least financial markets trading. Simply model the attributes of those who are doing it and doing it well, and you will save yourself those episodes you would rather forget – or even avoid.