| By: Harold Hsu |
Unfortunately, most of the time retail traders are looking to learn about the wrong kinds of things. We spend our time looking for the "best and latest" techniques and systems with the hope of making money once we adopt them.
The truth, however, is that there are other more important aspects of Forex trading that we should all be paying attention to! and these are the aspects that separate a consistently winning trader from a consistently losing one.
Forex Education Topic #1 - Understanding Leverage
One of the biggest attractions of Forex trading is leverage. We are all aware that in the Forex market, we can trade with a large amount of currency using only a fraction of our own money.
What most retail traders don't realize, however, is that leverage actually plays a major role in how they should manage their money (and risk).
Simply put: the more leverage one trades with, the smaller the stop-loss allowance would be available to them. If you don't know why this is so, I highly recommend that you study the impact of trading with leverage more carefully and how it affects your money management system! too many beginner traders have wiped out their accounts because they didn't truly understand the risks involved here.
Forex Education Topic #2 - Understanding Yourself
Among all the aspects of profitable Forex trading, this is arguably the most difficult to master. You can have the "best" trading system in the world; but if you find it hard to trade according to its rules, then it's still useless.
Understanding your own risk appetite is a crucial component of deciding which trading system you should adopt. If you're an aggressive trader, find a trading system that reflects your style. And vice versa if you're a conservative trader.
An old trader once told me, "The market is the perfect place to discover your true flaws". And now, I finally realize what he meant. My flaws of greed, fear and discipline have all been exposed to the market! and it's through the conquering of these flaws that you can emerge as a profitable trader.
Don't trade if you're not prepared to have your vulnerabilities exposed by the market.
About the author:
Visit http://forexsystemprofits.c om for more tips and techniques on profitable Forex trading. Get your free 26-page Forex trading guide while you're at it.
