So, in order not to lose profit, you need to fix it right now. Then it will be too late! But after the order is closed, the price moves in the right direction by 3,000 ticks. Or the same trick with losses: it seems that the trend is about to turn around, and the losses will definitely turn into profit. We need to be patient a little more, and more, and more This may result in margin call (lack of funds on the trading account) or stop out (forced closing of positions).
Fight with such intuitive insights as with the worst enemy. Otherwise, these fantasies will ruin you. And it will no longer seem to you that there is nothing on the deposit. The trading account will indeed be empty.
Recommendations:
Over the years of practical work in the market, I can say that it is before a powerful price movement that the temptation to close a position will be especially strong. And before a catastrophic increase in losses, it will seem to you that you should not accept losses. As if you need to wait another five minutes (an hour, a day, a week) and the trend will surely unfold. Use these unprofitable illusions to your advantage. When hands itch to close an order with a small profit by an effort of will, breaking yourself, turn off the trading terminal. And just take a walk for a couple of hours. With a high probability, the profit will significantly increase. Try this. Youll like it.
Of course, not every one of us is Peter Kapitsa or Mike Tyson. Think about it, for example, how many doctors are there in your city? Many. And how many doctors are there from God who are able to put an almost hopeless patient on his feet? Few. How many school teachers are there in your city? Many. And how many outstanding teachers who are able to interest students so that they do not want to leave the lesson? Few. And this is normal. True talent has always been a rare phenomenon.
Its the same in trading: youre not Livermore, Buffett or Soros. Do not try to appear to be someone who you are not. To reach the level of a professional (steadily earning, and not losing in the market) is quite an achievable task. For anyone who has the determination. Determination to learn every day. The determination to fall and rise, to make mistakes and correct them. And the most important thing is the determination to change.
Step by step
Demo or real account?
Trading starts with a demo account.
Although there is a dismissive attitude towards trading on demo accounts among many traders. This is considered a frivolous occupation, a waste of time, pampering. Lets allow ourselves to disagree with this.
You cant do without this first step, at least in order to understand the trading terminal, learn how to open and close orders. A huge advantage of a demo account is the complete absence of risk. Whatever happens there, up to the loss of all demo money, it will not affect your real wallet in any way. If you have a virtual million dollars in your account, after a couple of months you have leaked it, then you wont even shed a tear. Again, this is a huge advantage that should be used.
On the other hand, the deceptive ease and lack of risk, taken for granted on the demo, can play a cruel joke with the trader. The illusion of simplicity often pushes a person to hasty actions. We really want to skip the demo, this most important preparatory stage, and immediately start earning.
Trading terminals and mobile applications are now intuitive, and a schoolboy will understand them without any problems. And after a couple of days of training on the demo, a person already thinks of himself as a professional who is ready to rush into real stock trading, but
Dont forget: The beginning is half of everything.
The demo is this beginning, the first step into the world of professional trading. Like training before a competition or studying at school before going to university. No professional athlete in his right mind would call training nonsense because competitions only sum up long training sessions. And it is difficult for someone who trained carelessly to count on a prize place (making a profit on the market).
The skills and experience necessary for stable profit making should be sought precisely at these market trainings. And take them seriously, although it resembles a demo computer game: installed, played, tried, switched to real. Not hurry.
The importance of this stage cannot be overestimated, because working on demo builds your trading skills. If you get used to sloppily, without careful preliminary analysis, opening and closing transactions drag this ruinous habit to a real account. You will get used to moving stop-loss, obeying momentary whims you will move them on a full-fledged trading account. You will begin to close profitable trades at the slightest price pullbacks in the same way you will stop the flow of profit on a real deposit. You will look at the growing losses without killing them at the very beginning, you will get used to it, and with a high degree of probability in the future it will ruin you.
Do you need it?
Therefore, trading on demo should be treated as seriously as on real. Conduct a full-fledged fundamental and technical analysis of the selected financial instrument. Keep a trading diary. Do not be lazy to perform calculations and current records (lot size, number of open orders, stop-loss and take-profit settings, etc.). Fighting for every virtual cent on your demo account is an essential skill that will help you out more than once.
In trading, as in most other processes, haste is not appropriate. The case needs to be given time to ripen and bear fruit. As Warren Buffett says:
Even if you are very talented and make great efforts, some results just take time: you wont get a baby in a month, even if you get nine women pregnant.
And if your results on the demo leave much to be desired, its just too early for you to switch to real account, no matter how much you would like it. It will take as long as it takes. If you come to stable profitability on the demo in three years, then thats exactly what you need. In five years, that means in five years. This is better than rushing into the real market in a week, absolutely not ready.
And just give the broker your money.
The correct sequence of professional growth:
Demo account (100% profit with a drawdown of no more than 30%)
Cent account (similar benchmarks)
Real account of $1000 or more (without restrictions on the result)
If you stumbled at a certain stage, go back. For example, you did not cope with the cent account, practice again on the demo. And dont set any deadlines: in a month I have to or by the end of the year I plan to earn so much and buy this and that. The market is not going anywhere from you. The market will be in its place tomorrow, and the day after tomorrow, in a year and in ten years. Whether you will be in the market with money by then is a question.
To sum up: trading on demo should be treated as seriously as if your real money was at stake. Moreover, there is absolutely no difference in appearance. The same trading terminal, price movement charts, financial instruments, stock quotes changing every second. And the same numbers in the columns Balance and Profit, depending only on you. The whole difference is in our heads. Therefore, calmly, without haste, with pleasure learn to make money.