Trading 101
Before you do anything, before you start even thinking about the actual art of trading you must answer some basic questions. The reason I am starting with the thought process is because the biggest part of trading starts with your mindset. Anyone can click a buy button to enter a trade and a sell button to exit a trade. Even though that is technically trading, it is far from the ART of trading or profitable trading. Before I started writing this article, I decided to do some research and see what everyone else was saying. I found a lot of "guides to trading" and they usually started by explaining how to read the currency pair, or talk about "technical and fundamental analysis"; Some websites give you step by step rules on "leverage, following technical indicators etc." But the common thread between all the websites is that they explain trading like a text book, and jump right into technical indicators that you can follow and start trading right away, is that they are all brokerages and they make money from you trading "commissions" and not to make you profitable. I wanted to make sure that if you are going to read this article and invest your time into it, that it be should worth your time, because this whole site is designed to be unique, different from the "lets put some pages up to get some traffic". Everything on this site has to be something of REAL value, the REAL DEAL. With that said, I hope that you really take a lot from this article/site, and spread the word to your friends and family so that they can also benefit from the information found on this site.
The first thing anyone that truly want to learn how to trade should do is forget about trading. Forget what you are trading, it really doesn’t matter if it is stocks, forex, options etc. What you need to do is clear your mind and bring it to a place that is filled with peace. See it really doesn't matter what you are trading. All trading has a final step, which is the buy and sell clicks. Yes depending on the instruments there are some setups required, but that is technical information that you can get from anywhere. If I told you that "XYZ" was going to go up it really doesn't matter what "XYZ" is and the setup isn't all that important because that you will do like you do any trade. But you will buy and when the price rises you will sell keeping the profit. What I want you to understand is that trading isn't defined by what you trade or what information you trade off of, it's what your goal is. What you're trying to achieve, and most importantly it's about understanding risk.
What is the one thing any profitable trader needs to know to be a consistent profitable trader ???? RISK, that’s the answer to all of this, If you want to learn to be an actual trader, period, no matter what instrument you are trading, you have to trade RISK.
So you ask what is trading RISK, what does that even mean ???? The question you should ask yourself, ok I got my entry (based on signals/indicators/fundamental or anything else) but what will happen if the trade goes against me?
what will I do ?
What am I expecting from this trade if it goes in my favor ?
What am I expecting from this trade if it goes against me ?
The only real way to correctly answer these questions is by knowing certain things about the market. I am going to leave that for another section. But the questions above is what you should of answered before you enter any trade in any instrument. If you can't answer these questions or aren't answering these questions for every single trade you enter, and are already trading, either you're getting very lucky or you're not profitable.