Risk tolerance is how much of a loss you’re willing to take. “With no risk, comes no reward.” Have you heard this saying before? Keep in mind, it goes both ways, because the greater the risk comes the greater the potential for losing money. Risk tolerance defines your ability to withstand losses when things don’t go exactly as planned.
Every trader wants to avoid the mistakes of others, in order to make profits and be successful themselves. In a field where traders are seeking to make profits and turn profits into money, a mistake can turn out to be very costly and ruin one’s perception of trading. Just like with any other business and fair trade, the foreign exchange market is no different when it comes to following some guidelines and principles.
First of all, being a beginner in the big world of foreign exchange can be slightly overwhelming and extremely frustrating. But to make it through this often trying journey, you need to follow and trust the process because becoming successful in the market requires time, patience and a lot of experience. “Irrationality has a lot to do with fear.”
Keeping a trading journal allows traders to keep a record of their trades, thoughts, and feelings throughout the day. Trading journals are a great tool to have and making your journal as thorough as possible will give you details that go beyond the statements and profile statistics most brokers will give you as you go through your trading journey.