Mistake 1: Following Email Updates
Some of the best traders in the world read and subscribe to trading email updates, only to take the opposite view.
Just like shiny new trading systems, trading bots and live trading rooms, telegram groups, email updates from market ‘gurus’ are just as common. From experience I’ve found that a lot of these updates come from marketers who know a little about trading (just enough to sound credible) but, when you ask a question, there is no depth of knowledge. Just analyse the emails they send and there will be a link somewhere trying to get you to open a live trading account through some broker.
There are some good ones out there, but you have to be careful and, whatever you do, don’t blindly copy their trades. I’ve wasted thousands in the past watching a video update and becoming convinced that some currency is about to rise or fall, then placing the trade without any of my own analysis. This has never ended well. Even if you are convinced by an email or video update, just DYOR (do your own research). Never place a trade blindly without doing your own research.
Mistake 2: Not Having Risk Capital
You will absolutely need some learning capital while you develop your trading skills and experience. Just don’t expect to get your learning capital back!
Everything has a price. And don’t be fooled into thinking that the price is always in money. If you want to become a master knitter, the price will most likely be time in learning the skill and maybe a few bleeding thumbs. If you want to be a successful business owner or millionaire, the price you’ll most definitely pay will be in time, lack of sleep, stress and a diminished friend base, as well as possibly financial.
The reason why a lot of people aren’t millionaires or even wealthy is that they are not prepared to pay the price of becoming one. It’s far easier to clock in at work for eight hours a day, come home to dinner then go to the pub. Most people would shudder at the thought of quietly building a part-time business from 6 p.m. to 10 p.m. alongside their full-time job and managing their family. As any entrepreneur will tell you, stopping work for the day at 7 p.m. would be an early finish.
So how serious are you at becoming consistently profitable at trading? The ultimate reward is to be able to turn your laptop into a cash machine and live the luxurious life you want with just five minutes’ trading a day. The question is: are you prepared to take the time and effort to build your knowledge, to shoulder the cost of doing courses to learn from successful traders, and to spend the 12 months it takes on average to become proficient? More importantly, are you comfortable with losing a small bit of your capital? Every trader who has ever lived has lost trades, lost money and had losing streaks.
- Treat that first 2,000$ as learning capital and expect to make mistakes and lose it all. It’s best to get all your learning and losing done early on. I recommend that you stay on your simulation account until you are confident and profitable on it before opening a live 2,000$ trading account. Whatever you do, analyse every error and learn from your mistakes.
- Whenever you put money into your live account, it should be risk capital that you can afford to lose.