Today’s guest article is written by Forex day trader, Thomas Grow. Thomas is a staff writer for ForexTraders.com and certainly has some interesting things to share.
Life has been pretty rough for many of us, these last few years. Personally, in a very short amount of time, I’ve managed to lose my job, my house, my Hummer H2 (my baby), my 401(k), my pension, my savings, my lay-off severance, and I believe probably darn near my mind, as well.
I’ve learned a few valuable lessons along the way. Unfortunately, I learned these AFTER making the mistakes instead of before… but really, isn’t that the way most of us end up learning our life lessons?
In order to ensure that all of our suffering is not for naught, we should always make sure that we walk away from our mishaps with lessons to prevent us (and others whom we care about) from making these mistakes again.
I was fair to ruining all aspects of my life at once, not just in one area. I’m an equal opportunity destroyer. For me, here are some lessons that I have personally learned, from a trading and investing perspective:
1. Buy High, Sell Low… Not a Good Strategy
You’d think this one would be obvious. Yet, time and again, I seemed to be very good at mastering this strategy like some hidden super-talent. As a relatively new forex trader, I have had to learn the hard way that this is not a good strategy. I think I’ve mixed a couple of the words around in that phrase, “Buy High, Sell Low”… does the word order really matter? I’m thinking that, possibly, it does.
2. You Get What You Pay For Or At Least What’s Coming
Note to self: If you’re going to be trading your last few dollars in the hopes of somehow buying yourself back onto the yellow brick road, then at the very least, be very selective in whom you choose to work with as your trading middle-man. Just because you are saving a pip on the spread, it doesn’t necessarily mean that your overall savings will be a pip. Choose the wrong forex broker, and you may soon find yourself the victim of habitual slippage, or even worse, a toaster to the back of your head when your wife realizes how much money you just lost on your last trade through the discount platform you are using. Find forex brokers you can trust with your money on Forextraders.com.
3. Don’t Dive In The Shallow End
To have fun in a murky, piranha-infested pond (all the rage), you can’t just dip your big toe in the water and test the temperature. After all, it may feel fine to you, and the piranhas’ teeth may seem too small to cause much damage, but that big ol’ iron rod sticking up at the bottom pointing up may be a problem. Same goes with your investments. I “dipped my big toe” a couple times in an invested. I thought I was being really prudent by testing it out first before taking a major jump in the amount I was investing. Unfortunately, that little toe-dip wasn’t enough. Had I decided to wade out and do some more research, perhaps I wouldn’t have impaled myself financially on Murphy’s iron-stick-in-the-mud spike-o-rama in the middle of the dirty water. Instead of holding a new wad of greenbacks, I get to suffer from financial gangrene. Nice.
4. Mo’ Money, No Money (or, Easy Come, Easy Go Really Fast)
When you do find a little success in some of your decisions, whether it be a good investment (well, until it’s not anymore) or a good trade, it’s easy to start relating to the Top Gun-esque quote, “I feel a need… a need… for greed!”
The fact is, when you start make a little bit, it’s always better to take your money and run, rather than going double or nothing. I tried that the double or nothing thing. I won the nothing part. Yay. Don’t forget the song lyrics, “You got to know when to hold them, know when to fold them, know when to walk away, know when to run…” (Ha! I bet that song will be stuck in your head the rest of the day now!) Don’t forget… that song is called “The Gambler”. And that’s exactly what you’ll be if you take your chances and go for the big wins, instead of remaining cautious.
Summer Break’s Over
So when you look back on the trials you may have or may be going through, remember that there always is, if you choose to look hard enough, a silver lining to those very dark storm clouds. You are not a failure for going through the things you go through. You are only a failure if you don’t learn from the things you go through. Consider this a very expensive tuition in the college of life. Hopefully, lessons learned and applied will help you to be, not just well-weathered, but well-prepared for the future that lies ahead. May you make the most of your past, in order to make the most of your future.
Find more forex words of wisdom here on ForexTraders.com.