| Updated: October 30, 2024What You Need To Know About The Forex Market
This lesson will cover the following
- Why trading is so complicated?
- Knowledge is King
- Advises and final words
If you are content with letting other people tell you what to do without an actual understanding of the suggestions, what theyre based on and why, then you can skip this section (and the next few). What we are about to talk about is for people who want to become good traders. This is for those of you who wish to improve and to one day start leading and giving advice, instead of just reeving it. This is for those among you who want to be copied instead of just copying. Be warned, though – if you go down this path, it will require a lot of work and studying. Its not going to be easy but it will be worth it.
What is it About the Market That Makes Trading So Complicated?
The market is, metaphorically speaking, alive. Its a constantly evolving system and its inherent nature is to be in a perpetual motion. Things happen and the market changes. It cant simply stay the same. When there is enough supply but not much demand, prices tend to go down. But as prices go down, demand also tends to increase, which means that levels of supply and demand change, hence prices rise. This is a very simple way of looking at things. The market is a lot more complicated than this. However, it can give you a basic understanding of how things work and can show you how everything is interconnected. A political decision in one part of the world can have a profound effect on the market.
This is why trading isnt easy. Its why its more of an art than a science. Its why you need to know as much as possible in order to make the right decisions. The ineptitude of some traders to realize this is what caused their financial ruin. Never assume you that you know too much, or even enough. Always be aware that its possible youve missed something, because often times you really have.
Movies have a great way of portraying traders – young, full of life, cocky and successful. This is what everybody want to be. This is the type of image people see in their heads when they decide to become traders. Things in reality arent that simple, though. In the real world when you get cocky, you get sloppy, and that leads to serious losses. Every time you are content with what you know means that youre a step closer to failing. If you want to be a good trader, you need to constantly be aware of whats going on. You need to research, read, predict, decipher and pay attention to every detail. You think its hard to be a trader? It is! But its also one of the most interesting jobs in the world. There are very few things that give you the thrill of being right; of seeing something most people missed; of winning against all odds.
How Does This Knowledge Help You?
Knowing the nature of the market is what helps you to stay alert at all times. It helps you remember not to be arrogant and not to get cocky. It helps you cope with failure, because trust us when we tell you – you will fail a lot and you will lose a lot of money. But its OK. This is how the game is played – you lose, you learn, you adapt. A good trader is not the one who never loses. Its the one who wins more than he loses.
The market demands your humility. Its like a wild beast that can never be tamed. Every time you think that youve come near to conquering it, it reminds you of your own limitations. You better realize this sooner, rather than later – you cant get ahead of the market. No matter how good you are (or think you are), there will always be some sort of unforeseen factors somewhere in the equation. You need to know this and remember it well. Dont get personal when you trade. Its not easy but its necessary. If you want to become a real trader, you cant be naive. Even the most obvious trend can reverse unexpectedly. You think that your decision will guarantee you success? It might, but you should never believe that 100%. A good trader has good money and risk management, because a good trader know that he can never trust the market.
Final Words
Of course, you can count on social and copy trading, theres nothing wrong with that. But you will never be a real trader until you learn the true and brutal nature of the market. The market doesnt care about you or your profits – its unpredictable and unforgiving. If you want to be good at trading, you need to always remember that the market shifts quickly and its not to be trusted. You need to always be ready for the worst case scenario. Of course, were here to prepare you for everything you might meet and well definitely arm you with the knowledge you need to survive.