Biggest Mistake I Made in 2013 That I'll Never Make Again
I wanted to write this article to share something I've learned with you.To get more news about WikiFX, you can visit wikifx official website.
I still remember back in 2012 and 2013, and I got tired of trading and investing, trying to profit from the financial market.
Trying to gain an income from trading and investing gets tiring after a while, especially when we face a streak of losing trades or inactivity in the market. It happens to the best of us.
Then, I decided to do what many beginner traders do - increase my trade sizes and remove my stops, all with the idea that I wanna make some money, and I‘m not willing to take a ’no (aka loss) from the market.
I still remember that killer trade was on the German DAX 30. (The first mistake here - I have no clue what this is, just saw someone posted on social media and I decided to follow.) I was shorting it whenever it went higher. And not only I was adding on trades, but I was also increasing my trade size at the same time. (Another mistake here - there was no stop loss and I was adding on to my losses.) In a well-defined strategy, this technique is what we call martingale. Done properly, it can be a valid trading strategy. But honestly, I have absolutely no idea what I was doing back then.
I kept topping up my account whenever my equity was getting low till it reached a point where I have nothing left to top up. What‘s next？ Hope and pray that the market’s gonna drop soon. (Writing this just makes me laugh, what a stupid thing to do!)
Well… that didnt happen, and my entire capital of close to US$20,000 just went together with the market.
After that, I felt so beaten and I took a full 2 months of break from trading. It was certainly heartbroken, but some part of me wasnt ready to be beaten by the market just like that. I restarted my trading journey, this time committed to fully learn and understand deeply what trading and investing are. If you recall the recent incident where 20-year-old Robinhood trader, Alexander Kearns committed suicide after seeing a $730,000 negative balance, let that be a reminder that risk management is one of the most important aspects you need to master in trading and investing.
Equip yourself with proper education. As Warren Buffett said, “Risk comes from not knowing what you're doing.” You can mitigate at least some risk by simply learning more about what you want to do.
● Be comfortable with the math of trading and investing. A good book to read is The Trading Game: Playing by the Numbers to Make Millions by Ryan Jones.
● Develop the right mindset about trading and investing. It is a journey. It is a process. It requires hard work, dedication, and a certain level of commitment to succeed. And throughout this journey, learn to accept losses. They are bound to be part of your journey.