7 min read
Trading may seem easy and attractive to those who have never tried it before. This is in large part due to the influence of the media, which presents the image of the trader or investor in a very glamorous way. There are plenty of movies and shows out there, so even those who already have some trading experience still treat it like a game or hope it is an easy way to make money.
However, this is simply not true. Trading involves many challenges and risks that traders face every day. Everyone must know them and be ready to deal with them, in order to avoid unexpected disappointments and to focus on the important things. Today we are removing five hurdles traders may face as they begin their journey.
Trading requires (a lot) of study
While it is natural to study when one wants to become a manager, programmer or painter, when it comes to trading, one often expects satisfactory results without having to learn. The truth is, without understanding the trading instruments and the markets, it is not possible to improve, even if the trader is lucky from time to time. Relying on luck is not an effective strategy and will most likely result in losses. To develop, it is necessary to keep learning, finding new information, reading books, articles and watching videos.
Markets are constantly changing
The markets are always fluctuating and it can be difficult to understand what is going on. This is why it is necessary to always stay on top of the latest news, at least with regard to the assets on which the trader is focusing. Valuing an asset can be difficult, but it is crucial for making informed decisions. The first step is to become familiar with technical and fundamental analysis, as well as candlestick patterns. In-depth knowledge of possible market analysis tools can help decide on the most effective personal approach.
Trading is risky
There is a good chance that the entire investment will be lost when trading, and it happens very often. This can be due to many reasons: incorrect assessment of the state of the market, unpredictable price changes, emotional trading, etc. Even the most experienced traders still experience failures from time to time. It can be very difficult to set up a well-balanced trading system that takes risks into account.
Emotions interfere with reason
Speaking of emotions, this is a hurdle traders often don't expect. It seems that even though the trader cannot control the market, he is quite capable of controlling his own behavior. Unfortunately, this is not the case for the majority. Trading can cause emotions such as greed and fear. Add some excitement to the mix and the recipe for a bad business approach is complete. Emotions force traders to make irrational decisions, make hasty assumptions and, as a result, lose their investment. That's why managing emotions is just as important as researching the market.
Uncertainty and impatience
Impatience isn't exactly an emotion, but it can hurt just as much. With trading, there are no guarantees and the trader can never know exactly what is going to happen. No one likes uncertainty: everyone wants the best possible results, as soon as possible. Trading requires a little more patience and a strategic approach.
All these points being mentioned, trading cannot be considered "easy": on the contrary, it involves many risks. Trading involves an elaborate plan that combines market research, the use of analytical tools, the implementation of risk management techniques, the management of emotions and the management of excitement and excitement. impatience.
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Source: IQOption blog (blog.iqoption.com) 2020-09-17 07:54:32
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