“Trading is an easy way to make a hard living.”
I don’t remember where I heard that quote, but it can be very true, if you don’t have what it takes to be a trader. Many people are lured into Forex trading by the promise of easy money.
But just like any other business, trading takes time to master and will have its ups and downs. It’s not all mansions and Ferraris.
So in this post, we will give you five key characteristics that we see in people who should not be trading. Take an honest look at yourself and see if you posses these traits.
Obviously, if you work really hard at mastering trading and you really want it, then it is possible to become a successful trader. But if the traits mentioned in this post are deeply engrained in your personality and you don’t want to change, then you are generally better off not trading.
Admitting this fact and stopping trading, will probably greatly lower your stress level and have a positive effect on your bank account.
We don’t want to rain on your parade, but all that we ask is that you take an honest look at your situation and see if there is something else that might make you happier.
1. You Don’t Have a Strategy (and don’t want to learn one)
This is the biggest trading account killer.
If you are guessing and placing trades based on “gut feel,” then you should not be trading. Sure, some traders trade really well on intuition, but that is only because they have spent thousands of hours in front of the screens and their experiences give them clues as to where the markets are going.
But if you are just getting started (or even if you have been trading for awhile) and you don’t have a definable trading strategy, then you have almost zero chance of success.
Sure, you may have a few lucky trades here and there. The sun shines on…yeah, you know what I mean.
After your luck has run out however, your lack of a trading method catches up real quick.
2. You Have the “Lottery Mentality”
If you think that your next trade is going to buy your Lamborghini, then trading probably isn’t for you. We see this a lot and it is the biggest reason that people blow out accounts.
They are so sure that the next trade they take will be a big winner, that they risk 20%, 40% or even 80% of their total account on the next trade.
Well, how many times do you have to be wrong for you to lose your entire account? Yeah, not many.
Remember, if you have a 50% loss, you now have to make 100% to get back to breakeven. A lot of the best traders in the world don’t make 100% a year.
So the lesson is: keep your risk low, or don’t trade at all.
3. You Don’t Have Time to Trade (and study)
If you can only sneak a day trade in between the time you get home from work and when it is time to eat dinner, then trading probably isn’t for you. It is a performance endeavor and you need to take the time to get properly educated and prepared.
“Throwing in a few trades” will never get you results…not matter how easy it seems.
Most people are busy. If you are REALLY busy, then consider not trading at all.
Or trade longer time frame charts.
Daily and weekly charts can be a great way to trade around a busy lifestyle. Also be sure to commit some time to education, before you start trading.
Most people can find the time to do anything, if they make it a priority.
But if you still can’t find the time to do it right, then trading might not be for you. It might be better to have someone else trade for you.
4. You Don’t Enjoy the Process
Do you get physically sick when you sit down to trade? Does your blood pressure double?
OK, it might not be that bad, but if you don’t actually like the process of learning, doing the research and placing trades, then why do it?
Life is too short.
There are so many other things that you could be doing right now. Get out and do them.
You can make money in so many other ways.
If you still want to take advantage of Forex, consider having a professional trade your money. If you find that you don’t want that option either, then don’t do it.
You will be much more likely to do be successful at something you enjoy, instead of just doing it for the money.
5. You Refuse to Pay for Education
While it is certainly possible to learn to trade via free forums and information on the internet, it is significantly harder than shelling out a few bucks and taking some courses. The best way to learn anything is by doing what successful people have done before you.
It blows my mind, how many people come to Forex trading with advanced degrees that took years and, tens or hundreds of thousands of dollars to attain. But when they want to quit their job and trade for a living, they are too cheap to spend $300 on a course from a reputable educator.
They get all their information from free forums, find bootleg downloads from Torrent sites and they try to get programmers on forums to create indicators for free.
Seriously, you will get what you pay for…most of the time. On top of that, when you only use free resources, you will have to sift through a lot of crap to get to the good stuff.
Proper education will save you so much time. If you are too cheap to do it right, then you will get what you pay for.
So those are five ways to tell if you should be trading Forex or not. You are obviously free to make your own decisions, but they are things that you should carefully consider.
If you have decided that Forex trading isn’t your cup of tea, our signals can still help you take advantage of the opportunities in the FX markets.
If you have any questions, contact us to find out more.