Leveraged trading is trading where 100 times more currencies, stock indices, cryptocurrencies metals,s, etc can be traded with a 1% margin. This type of trading is profitable and risky as well. Purchasing a lot of 1,00,000 will result in 1000 with a 1% gain and 1000 loss with a1% loss. Note that with a margin of 1000, various brokers made arrangements to buy and sell lots of 50000/.100000. If anybody runs the business by following the rules, he will be able to make a satisfactory profit experience has shown. Repeatedly speaking, success in this business will come by following the existing rules, not on the basis of hope and imagination.
Since this article is about small traders associated with leverage trading (forex, stock indices metals, etc) it is important to know the psychology of small traders. At present total transaction of forex is USD 6.6 trillion per day.
Psychological analysis of small traders.
Before analyzing the leverage trading( forex, stock indices, metals, etc) guide step by step it is important to give some idea about the psychological behavior of small traders. It has been observed that small traders enter the market with excitement and dreams after getting information about leveraged trading( forex, stock indices, metals, etc) from someone, but by failing to follow the proper rules and regulations, they blame forex trading as gambling after incurring a loss.
Lack of proper step by step knowledge about trading,
the inexperience of the ariel castle thinking trader is responsible for business loss. Reviewing the activities of traders it has been seen that small traders open an account with a broker and start trading without receiving any training considering this an easy task. They also have no idea about the signals received from different indicators. They don’t know how to make a strategy with indicators, They don’t know how the indicators work. They also have limited or no knowledge of how to use that technique
They have no idea about the greed for profit in trading and the bad consequences of not using a stop loss.Needless to say, I have seen a small trader who has no idea about RSI, a simple indicator, known for trading, whereas he opened an account and started trading downloading MT4 from a brokers’ website.Most of the small traders have no idea about the creation of templates and their uses.Just as it is true that they have no idea about the techniques of trading, it is also true that they are reluctant to take trading ideas. They understand profit from business only but don’t understand gaining knowledge, gaining experiences by following rules and regulations. They don’t want to take training from the training institute as well.
Necessities of acquiring knowledge and receiving training of small forex, stock indices, metal, etc traders.
If we look at all aspects of human life in food, clothing, housing, education, medicine, information technology, banking, insurance, or any other field, we see that firstly the interested people acquire knowledge about each profession, then they take the practical training and get experiences based on the acquired knowledge. After that, they earn their living by this profession. Again, I have seen in the case of many people who make a living by playing a game of animals and birds, they also train animals for the needs of the profession. But in the case of leverage trading( forex, stock index, metals, etc) it is seen that the person concerned does not want to learn anything, just tries to understand the profit, only.
Successful leverage trading traders earn several times more than traders of other professions, this income does not come home automatically. More income requires more knowledge and experiences. How it is possible to have a successful business by all these novice traders who are not interested in gaining knowledge and experiences about leverage trading (forex, stock indices metals, etc)?
The present era is the era of advancement of information technology where you can take part in this leverage trading( forex, stock indices, metal, etc) from home in any country of the world through the use of an internet connection. In ancient times when people used to buy and sell valuables goods like gold, silver, commodities, etc from one country to another it took a long time. There was no determinant, there was no use of modern information technology. But due to the application of current advanced information technology, currency, gold, silver, and commodities of one country can be bought and sold in another country within few seconds.
Despite the advancement and uses of science and technology traders have neglected to acquire knowledge about the techniques of leverage trading( forex stock indices) etc). Because of apathy and ignorance, they cannot succeed in business. Negligence of acquiring knowledge is such that even one has to cook one kg of rice, one has to acquire knowledge but without acquiring any kind of knowledge and experience they do huge business like leverage trading. As a result, they become unsuccessful in comparison to their expectations.
What is that knowledge?
Now the question is, what is the knowledge and experience that small traders are being deprived of the opportunity to profit from a large business like leverage trading( forex, stock indices, etc)Some of the knowledge consistently given below.
Step 1:At first a trader needs to acquire acknowledge about leveraged trading (forex, indices, metals, etc) such as the definition of forex, stock indices, metals, how to trade, who are the brokers, who are well-regulated brokers, how much is the daily transaction amount in forex, how money is deposited, and how money is withdrawn, etc. A lot of information is available on the website. Interested traders can visit the websites.
Step 2: Acquiring ideas about the news: The rise and fall of leveraged trading items (forex, stock indices, metals, etc) are influenced by a different kind of news of the central bank of the nation, news of big companies, etc. There is a various website for getting information related to this. Traders can collect information from websites. A trader needs to have a good idea about the impact of news on the market. After that trader has to run the business using indicators. They must keep eye on the news of trading terminal Meta Trader 4/5 or other trading terminals regularly.
Step 3:Technical indicators: After gaining an idea about the news related to leveraged trading( Forex, stock indices metals, etc) traders need to have a clear idea about the various technical indicators. Trading terminal Metatrader 4/5 contains over half a hundred technical indicators. These indicators have been developed by various researchers after long research to understand the nature of the market movement. From there, at least three or four indicators such as the Moving average curve( 21/50/100 days duration) RSI, MACD, Ichimoku Kinkey Hye, Candlestick chart may be used to get an idea. The more trader can gain knowledge with more indicators, the better. Note that though the candlestick chart shows the price, its different forms work as technical indicators.
Step 4: Creation of a strategy and save in the template: Traders have to build a strategy with candlestick charts and at least three indicators and save in the template of MetaTrader 4/5. The trader will conduct business based on the signals generated from there.
Step 5:Gaining an idea about risk management or currency management: The trader has to know what amount of volume will be traded with what amount of fund, where to use stop loss, where to take profit etc. For example, if a trader has a fund of 10,000 USD (US Dollar thousand) in an account, a trader cannot take a position for more than USD 50000, it is better to buy and sell USD 30,000. Due to this step, profit will be lower when profit is made and loss will lower when the loss is created. By this step, capital will be preserved. The trader should conduct their business on one’s own knowledge and experiences, not on the knowledge, experiences of others.
Step 6:Keeping a daily diary: A Leveraged trading trader should write down his daily trading experiences in a diary. Leveraged trading is affected by different kinds of events. and Its impact on trading to trading is different as well. There will be different kinds of success and failures at the beginning of the business. A daily diary will help the trader to remember these events and take the right decision in the future.People often can’t remember many events. This diary will work to remember past events.
Step 7:Home work: Homework should be done on the trading set up ( 15 minutes/30 minutes/1 hour/4 hours interval) equipped with special strategies organized in the past and arrangements should be made to remember the acquired knowledge. At one stage of acquiring knowledge on medical sciences, students need practical experiences on the human skeleton. Like this, the trader has to conduct homework on static images executed in the past trading setup.
How long it takes will depend on the trainee’s ability to acquire knowledge. Experiences suggest that significant time will be needed to complete this important task.
Step 8:Demo live Trading: After gaining knowledge on the past static trading setup, a trader needs to gain experience on the live trading setup. This will require a demo live account. All forex brokers have the facility to trade in demo accounts for their clients. In order to get a good idea, the trader has to trade using multiple strategies made with indicators. By trading a certain amount of virtual money ( say. USD 10000 or more) in a demo account traders need to understand how the profit and loss are made and to what extent. The question is how many days will an interested novice leveraged trading (forex, stock indices, etc) trader continue a strategy-based live trade on a demo account? The answer is that the training trade in the demo account will continue until full assurance of earning money through leveraged trading( forex, stock indices metals, etc) is achieved.
Step 9:Trading in a real account: After gaining knowledge and experience in a demo live trading account, if an interested leveraged trading trader(forex, stock indices, metals, etc) thinks that he can make money by trading, he can open an account with a regulated broker and start trading by following the rules and regulations
From the above discussion of leveraged trading( forex, stock indices, metals, etc)it can be said that leverage trading is undoubtedly a risky, laborious, and profitable business. There is a good chance of losing capital if traders are involved in this business without proper knowledge and training. Just as the use of fire with training brings human welfare to the world, the use of fire without training can burn and destroy everything. Participating in leveraged trading without proper training and experience is like playing with fire without training. So small leveraged trading traders are requested to acquire the appropriate knowledge and get experience and then trade, you will succeed in it. Keep the responsibility of making your destiny to yourself and do not leave it in the hands of others.
The good news is that although leverage trading is affected by a variety of news, trading relies on technical indicators. Therefore the chances of success are higher if the trader acquires theoretical knowledge as well as good knowledge and experience about technical indicators. It will take a long time for a person to become a successful trader by following the rules and regulations as described above- it has been experienced.
We know that making money from any profession is not an easy task. A person has to spend a long time in all business/ professions to get an education, gain experience, and earn income. Similarly earning from leveraged trading is not easy. Here too enough knowledge, patience, hard work, and time are required. In other words, making money in all systems/ professions are considered difficult, so why would it be easy to make money from leveraged trading? Those who think it is easy to engage in leveraged trading based on the knowledge of others will make a mistake. Remember that your own knowledge and experiences are power, not reliance on the knowledge and experience of others.
Is it possible to gain knowledge about leveraged trading? Notice that those who will start leveraged trading must be highly educated people. has graduated from any college or university. He has been educated by working hard year after year, I think if the interested educated person wants to learn the techniques of leveraged trading with perseverance and hard work, he can easily learn. It is not a difficult task for an educated person. Do not engage in profitable but risky activities like leveraged trading without getting proper education and experience. There is a good chance of losing capital. losing hard-earned and accumulated capital will make life miserable.
The article is written by Muhammad Abu Taleb