Recently I have been trading forex, and I have learned a lot about how to read chart and different indicators. It is quite exciting to me, even though I have paid a lot (or you can say “LOSS” 🙁 LOL!)
At first I was all fundamental analysis, not really interested in reading chart, but only focus on news and world wide economic, but I have lost almost half of initial capital because of that. (I will say, fundamental probably works well if you have a lot of money and willing to go for a very long term investment) Later then, I read some book for technical analysis, and found out the chart can actually reveal many secrets of how the price will go. I was successfully trading for awhile. However, later I was flooded with different indicators and oscillators, and lost of emotion control, I again found myself lost and of course my account was reducing.
But then, although I have loss a huge amount of money, I also gained a lot. It is experiences. Trading is not gambling. The most important part for trading is the risk management and discipline. You must set your own rules to trade. You must follow your own rule to trade. You must set Stop Loss to prevent further loss. You must accept loss because no trade can be sure win. If you found the rules you applying to is losing a lot, you should adjust your rules. Because we are smart people, we know how to adjust to be success.
I have lost most of time is because of “Close the winning trade too early, and keep the losing trade run”. That foolish thinking just only got my account looks good on balance, but actually was losing a lot! (because your balance not show the true value until your trade is closed)
Now I trade better. I follow my rule, and I feel that my account will start to grow(slowly). 🙂
Today actually I was not giving a lecture about my trading experience, but just came up my mind because I was talking to my friend, about the Tax on Forex. He was talking about how much tax he had to pay for his country. But I said, “If you are making profit, why not paying tax just like helping your country?” And his answer was if he made profit, he has to pay tax, but what if he has loss for that year? He would not get back anything. Actually that make sense, you win but you have to pay, you lose but you get nothing back. Seem not fair.
Oh well. He is right, but I can’t totally agree wit him. So that’s what my title is: Why trade? If you think that you will lose at first, then why trade? 😉
