When you start out with trading, you are often given quite a few different tips and anecdotes that people tell you. These are often things that are to do with your trading to things that you should be looking out for. They are more than helpful and they are things that you should always keep in mind, the problem is that when we have been trading for a while we often lose sight of them, or stop putting as much effort or sometimes simply ignore them completely which can have an overall negative effect on your trading. We are going to be looking into some of the things that traders take for granted but really shouldn’t.
One of the major things that traders often take for granted is the importance of proper risk management, it really doesn’t matter if you are new or an experienced trade risk management should have been ingrained into your mind. The problem is that as you see others making a lot more money or many extra pips each month, it can make you want to grab some of those yourself. It would be great getting all those pips right? The problem is that you are not currently in a situation to do this, so the only way for you to achieve that in a short amount of time is to throw your risk management out of the window, something that we know can have disastrous effects on your account and trading strategy.
So why is it that so many traders seem to forget about the importance of it? It can come from a few things, greed, envy, and overconfidence are the main three. They can all make you want more and to want to make more quickly. It is important that you are able to stick to the plan that you originally created, understand that it is paramount that you stick to it, it should always be one of the main things that you are thinking about when you trade and should never be put on the backfoot, so whatever you do, do not take your risk management plan for granted, it will only lead to disaster and the potential loss of your profits and even your entire account.
When you started trading you would have created a trading plan, much like any other person would have been instructed and recommended to do. That trading plan is what details everything about your trading, the entry requirements, the exit requirements, the risk management that you have in place, and your risk and reward ratios. This plan should be the thing that you follow for every trade, but you will be surprised at how many people take this for granted and begin to make trades that are notably in line with their trading plan.
When this starts to happen, things can begin to go downhill pretty quickly, and that is not a position that you want to be in. Your plan is there for a reason, your entry requirements are there for a reason, as soon as you start moving away from it you are making bad trades. People take their plans for granted and they also take for grants the reason why they have this trading plan. It is there to be followed so it is important that you follow it, if you don’t and you take it for granted, a good chance that you will begin to make some of the more common trading mistakes.
Another thing that people often take for granted is consistency, consistency is one of the most important things that can help to make or break a trader and a trading plan. Many traders completely underestimate the importance of staying consistent and sticking with your trading plan. Consistency is what allows a strategy to be profitable and to remain profitable over a longer period of time. Consistency also allows you to learn more about their own mentalities and the system that they are using. Consistency also allows traders to keep their results more consistent, as soon as you break that consistency you are skewing the results of your trades and account, you are also potentially putting your account in some additional risk which will ultimately only lead to losses in the long run.
There are also those that make things a little bit too complicated, keeping things simple can often make your life a lot easier and your overall trading experience a lot more enjoyable. When you start to overcomplicate things wither through too much analysis by looking a little too deep into the numbers, then things can begin to confuse you, you will begin to see contradicting information which can either confuse you or make it hard to actually make a trade. Try to keep things simple, use your basic analysis, and the requirements of your trading strategy only, do not try to add too many different variables into it. Keep things simple, do not take the simplicity for granted by adding a large number of additional variables or requirements, this I’ll only make your trading less fun and more tiresome.
The dangers and also your expectations can kind of be looked at with the same stroke. When we are starting out, we often make some expectations that are a little too high, a little bit unrealistic and we take for granted how important it is to set our expectations to a more reasonable and at an actual achievable level. Without doing this we are putting ourselves in a position where we may not actually be able to achieve what we want and this will only lead to disappointment and a loss of motivation. You need to set your goals at a level that you are able to achieve within a set timeframe, where you are able to measure it and also at a level that is realistic to your current skill and knowledge level. These goals cannot be to make $1,000,000 overnight, as that just won’t happen, see them properly and you will continue to have the motivation to reach them as well as being able to see the progress towards them, which is vital for someone working towards any sort of goal in their life.
So those are just some of the things that [people seem to take for granted, often on a subconscious level, they look past them or completely ignore them in their pursuit of better profits or better results. It is important that you never take the things that you have learned for granted, always use them in your everyday trading, use them to develop your own trading skills, and use them to help you remain profitable and consistent. Taking things for granted at any time in your life will put you in danger and this is very true for things like trading in forex, taking things for granted and you are risking your account and any money that your currency has in it.