A trader who wants to survive and prosper must control losses.
With the emergence of cryptocurrencies, an enormous amount of unexperienced investors got into trading. It is not strange at all, then, that scammers saw it as their shining moment. As a result, hundreds if not thousands of telegram groups were created, promising a secret algorithm, let’s call it a miracle 2.0, that will multiply one’s returns by ten.
As crazy as it may sound, many newcomers actually believe that successful traders have some secret knowledge that allows them to stay afloat, no matter what happens in the market. In reality, this fantasy only helps “filthy players” to make money on simple men, by increasing sales of advisory services and ready-made trading systems and bots.
As Alexander Elder, a Russian-American professional trader and a teacher of traders, stated in his book, “He may send money to a charlatan for a $3000 “can’t miss,” back tested, computerized trading system. When that self-destructs, he sends another check for a “scientific manual” that explains how he can stop being a loser and become a true insider and a winner by contemplating the Moon, Saturn, or even Uranus.”
Many newcomers also think that they would trade successfully if they had a bigger account. The true problem is overtrading and sloppy money management.
A trader who wants to survive and prosper must control losses. You do that by risking only a tiny fraction of your equity on any single trade.
Either way, one should always remember that markets are always changing.
“Yesterday’s rigid rules will work less well today and will probably stop working tomorrow.”
Don’t let scammers fool you. Invest your free time in learning the market you plan to operate within.