” Forex Trading is so hard. I seldom have a winning trade!”
” Forex Trading is so easy. I just have another winning streak for the entire week!”
Two Groups of Forex Traders – The Losers And The Winners
Read the two statements above again. These are two of the main statements I often hear from friends who are trading forex. Diametrically opposite, these two statements contrast greatly between themselves- one group of traders finding forex trading so very difficult for themselves, hardly able to get a winning trade. Traders from this group are fumbling at the ropes, trying to become profitable traders and to be able to bring home the roost. Traders of another group are the happier ones. They are consistently profitable in their trades. They are the winners in the forex market.
You look around- and you see others are doing so well in forex trading, and amassing personal wealth, even trading for a living- some of them making thousands of dollars each time they trade- and you think you should be one of them.
Why 90% Of Forex Traders Are Losers
So why is it that 90% of the traders in forex not making consistent money? What is it that the other 10% of the traders have that make them the superb winners?
Currency trading was until recently the domain of the super rich and of the big time institutions. Unless you are well oiled, and have deep pockets or a huge sum of money as a capital support, it is not likely for you to even access currency trading.
However, this changed with time, especially when forex mini accounts were created, leading to a surge in people wanting to trade in forex.
This led to a problem…and the problem began to become bigger and bigger and exists till this day.
Forex trading is just simply exploding, with over $2 trillion dollars worth of currencies transacted every single day, with this accelerated growth bringing along problems.
Many people are getting into forex trading without the proper training and proper education as traders. The easy accessibility of the internet made it worst. Many beginners merely scour the internet based websites, picking up morsels of trading knowledge on forex here and there and started to trade. Not that self education is not enough, but the nature of forex trading is such that those who are successful traders are simply not telling how they trade. Most successful traders are traders, their time being occupied by their trading and research into trading setups and have no time to promote their trading signals on the internet. To them, they are first and foremost traders and not educators, and there is simply no reason to post their skills or give away their secrets of successful trading for free on the internet.
The easy access of the internet has led to a proliferation of websites featuring some common trading systems purportedly useful for forex trading. The popularity of forex trading has led to a viral duplication of these websites with almost similar content, until a big majority of forex traders who gleaned their “education” and training from the internet to concentrate on such systems, without knowing exactly when they are suitable for use and when they should not be used at all.
Among other factors, this is one of the main factors why a big majority of the self-taught forex traders are not making any money, or at best are inconsistent in their trading. Most of them are just using the wrong tools or the wrong trading systems and have not gotten to master their trades or themselves.
Sun Tzu”s Art of War Provides The Solution To Your Trading Blues
Sun Tzu’s Art of War provides a key solution to successful battle, which can be extrapolated to forex trading.
Sun Tzu’s Art of War called it: “Know Your Enemy”
And your enemy in forex trading is merely the forex market itself and you- the person itself.
To win in the forex market, you must know the forex market itself – in other words, you must get to understand the currency-pairs that you are trading on. Spend time to study their price movements. Know what trading patterns and setups occur time and again in those currency-pairs. Be familiar with the risk-reward ratios of each specific trade pattern for those currency-pairs you are trading. Define and apply a specific trading strategy for those currency-pairs you trade. Know when to enter and exit the market and when to stay away. The best way to ensure you are doing it correctly is to get another experienced and successful trader to mentor or to show you the ropes. Budget to learn before you trade.
As to the other part of the battle, you need to see the part of you, yourself who is the enemy. Forex trading involves decision making where your risk tolerance is put to the test, where emotions of greed and fear will play a daily tug of war within your heart. The solution to win this emotional battle is to trade with discipline. Adopting a winning strategy, a winning plan complete with risk management and ensuring you do not deviate from that plan is a necessity for you to win. Again, have your mentor to show you and to fine tune that trading plan.
You can join the 10% of forex traders who are consistent winners, and start to create a consistent income trading from home, away from the rat race if you are prepared to learn.
Source by Peter Lim