Skip to main content

A Step By Step Guides on How To Avoid Losses In Trading 1.1

 A Step By Step Guides on How To Avoid Losses In Trading - Part 1.1



In this article, we shall be taking a section by section and please make sure you follow every section of the parts until the end, to have elaborate understandings of trading in order not to invest your hard earned money blindly - experience is the best teacher 



Take a due diligence to go through this article on how to avoid or minimize the cost of losses that may arise from trading on the internet as it matters, but not limited to forex trading only.




If you have been trading for a while now or you   have just got started or even planning to jump into the processes involve in trading forex, stocks,   options, indices, futures, as it is referred to online   trading in general;

 here is a few things you might put at the back of   your memory that may limit, minimize or avoid   you losses in the course of trading on the internet   also may be referred to as margin  trading in forex.


Although, even when there is no single unified formula, plan or strategy required for a trader not to do away with losses, there could be some sorts of better ideas a trader may put in place in order to achieve some profits or success over a specified period of time. And this scope may allow us highlight some main points:



1. Choose A Mentor

2. Select A Broker

3. Open A Demo Account

4. Create & Develop  A Plan

5. Open A Real Account




1. Choose A Mentor



Whether you agree or not, being a pro, expert, advanced, intermediate or a novice trader, there is always one or a few traders you look up to, for inspirations or educational purposes. Those days when I started trading forex, the first thing I would do was to look for a real time successful traders within my locality, glancing through google and wikipedia, to see profiles of world most successful traders of all times, so as to be motivated and energized that, a skillset I was about to perfect would not be a total waste of time, back then in 2009.




Hopefully, I came across several traders in my locality in the region of Lagos Nigeria who we happened to meet in real time. These traders made several references to other successful traders. There my journey as a forex trader began, from reading hardcopy journals to reading online journals. All these processes are a means of choosing mentors. Your mentor(s) is that person you look up to for direction towards your success either being a positive or negative influence.




Choosing a bad mentor could lead a trader to a wrong direction that, all focus would be diverted to doing the wrong things. As a trader, how you look at the market from foundational level (the market sentiment) is a lot of influence in decision making in trading. How quick is the reactions when a trader opens a position or his reactions when in a negative floating position, holding on to a positively floating position until it's all back in loss, cutting a winner out of fear of losses you encountered yesterday, are all functions of how you learnt trading from the foundational level, the mindsets you were breaded with as a trader, just like an inheritance from a mentor(s). In trading there are many things to learn and develop on your own, but that also could be quiet similar or familiar with that of your mentor(s).




In a similar way, choosing the right mentor or the best possible means of learning is a great way that could project you in achieving great success in trading. Having a great learning experience is the best way to make a breakthrough in your trading journey. Learning trading with bad habits would determine the type of trader you may become, remember in our previous discussion about having a market sentiment how it may influence your trading decision making (before, during or after position taking decision making). I will not take this type of trading again, oh! uh! had I known, I would have liquidated my position, oh! let me hop in the market now before it might be too late, meanwhile it is you that is not wrong nor the market, but the law of trading keeps proving you wrong or right, only for you to realize that consistency is one of the biggest factors in trading. A trader keeps changing from one strategy to another, month on month, year on year, only for him to realize that there is no consistency in profit/loss making.



Therefore, choosing a right mentor(s) or learning platforms is a great way to be on top of the game as one of the steps by steps guides on how to avoid losses in trading, but not limited to all of these above or further discussions.




However, having a great learning experience is one way influential in the type of trader we become, whether bad or good, profitable or not, honest or fraudulent type of traders, the next thing to think about is how to choose a good mentor, which depends on individual. If your aspiration is to learn how to dupe or scam other traders or be a genuine trader, it all begins with you. There is a saying that birds of the same feathers flock together( am I right or wrong?) oh uh! well, maybe or maybe not. Let us begin on how to select a right mentor or learning platforms.


How To Choose A Mentor


Now you know the importance of how a mentor may influence your trading decision or can influence the type of trader you may become, then let us try to analyze how to select a good mentor. Shall we? oh ok!



i. Sounds so promising

ii. Eager to request for fees

iii. Not keeping to his promises

iv. He is out of sight





In our next section, we shall be taking a look at the above points. Thank you!


Comments

Popular posts from this blog

Retail Trading Vs. Institutional Trading

Chart Of Euro Vs. Canadian Dollar R etail foreign exchange trading   is a small segment of the larger foreign exchange market  where individuals speculate   on the exchange rate between different currencies. This segment has developed with the advent of dedicated electronic  trading platforms   and the internet, which allows individuals to access the global currency markets. In 2016, it was reported that retail foreign exchange trading represented 5.5% of the whole foreign exchange market ($282 billion in daily trading turnover). Prior to the development of forex trading platforms in the late 90s, forex trading was restricted to large financial institutions. It was the development of the internet, trading software, and forex brokers allowing trading on margins, that started the growth of retail trading. Today, traders are able to trade spot currencies with market makers on margin. This means they need to put down only a small percen...

Margin Trading & What It Means

What Does Margin Trading Mean? If you've ever scrolled through any broker's website  or trading platform and seen the option to "trade on margin " but had no clue what that meant, you're not alone. Margin trading sounds super fancy and a little intimidating, but at its core, it's just borrowing money to trade bigger than your wallet would usually allow you to. The Basics Margin trading is when a trader borrows funds from their broker to increase the size of a position. Think of it like trading with leverage. You put down a percentage (called the margin), and the broker covers the rest. For example, if you wanted to buy $1,000 worth of EUR/USD but only have $100, margin trading lets you make that happen. Why Do Traders Use Margin? Amplified Profits: Bigger trades = bigger potential gains. More Flexibility: You can open multiple positions without tying up all your cash. But Hold Up — There's Risk This isn’t free money. Just as your profits get amplified, so...

Understanding Leverage & How It Can Be Used To Maximize Profit/Loss In Trading

What Is Leverage And How It Can Work For or Against Traders? ⚠️Trading is risky, only trade what you can afford to lose   Start trading with FBS Markets   If you’ve ever dipped your toes into the world of trading—especially Forex—you’ve probably heard the term leverage tossed around like it’s some magical cheat code. But let’s be real: leverage is powerful, but it’s no free lunch. It can make you or break you. So what exactly is leverage, and how can it supercharge (or tank) your trading results? Let’s dive in. What Is Leverage? Leverage is essentially borrowing capital to increase your position size in a trade. Instead of using only your own money, you're using a combination of your funds and borrowed funds from your broker. It’s like using a lever to lift a heavier weight than you normally could—hence the name. For example: If you're trading with 10:1 leverage, you can control $10,000 worth of currency with just $1,000 of your own money. Pretty cool, right? But also kinda ...