Most people’s
experience in the Forex Market is relatively short and in no way
profitable. They hear about the currency market and think it is an easy
way to make a lot of money in a very short space of time. Now, I am not
saying this can’t be done, because for some this is true, but for the
majority it’s certainly not the case. Let me explain in more detail …
In the early stages of most FX trader’s career, the first trading
decisions generally come from tips and recommendations from brokers, alert
services, forum threads or sometimes even mutual novice trading friends.
Then, at some point, traders decide to study the market and attempt to
find the perfect system or method to trade with. I am sure you can relate
to the following statement; for many traders, the forex market and it’s
nuances truly become an obsession that takes up countless hours of
searching on the internet and books, forums and DVD’s , in the hope to
find the holy grail forex trading system, which they eventually find out,
simply does not exist.
Traders develop or buy a system and start trading way to soon. Sometimes
it is profitable, but when it has a few losing trades (which is normal),
they change the system, read a new trading book, etc. or go back to
looking for tips and advice, back to the forums, back to Google, searching
for more information. After some time, and after more losses and
frustration, most give up and stop trading altogether. Or, they go on the
analysing merry-go-round, keep paper trading and never get any financial
success from their trading; this is the case for 90% of newbie and
intermediate traders.
A few realise that the trading method they are using is not the actually
problem and the most important ingredient in their trading is actually
they.
In addition, they soon realise that a sound set of trading rules is
essential to trading profitably. But if the rules are not followed, they
are of no value, and an average trader will have difficulty making a
profit with a good trading system. Ironically, a good trader who has skill
and a good mind can make a profit with even an average system. Put simply,
even with a perfect system, the human mind can stop it making money!
Statistics from surveys of US traders indicate that once a trading
methodology is developed by a forex trader, then 80% of the effort in
trading is actually trading skills (that includes things like trading
psychology and money management).
When the trading system is developed and trading skills are learned, a
person starts finally trading properly. Most traders encounter a setback
at some stage; either the market conditions change or they don’t follow
their rules. However, if good money management is followed, this is not a
serious problem. Often, even after winning for several months, after a
small set back, many great traders stop trading to evaluate what has
happened. This is often a mistake, and is again, the ever-present
emotional element which plays in the back of our minds every day we trade.
It’s a mistake to interfere with the consistent day to day trading
routine, even in the face of losses, the trader has to press on and
believe in what they are doing.
Here Some Common Traps Traders Fall
Into:
This is where
the real decision about the trader’s future is made:
1. They stop trading all together
2. They find a new system, read a new book, and do another course. This
can go on forever and successful trading will never happen.
Or
3. They evaluate what really happened. Mostly it will be that market
conditions had changed or they didn’t follow their rules.
Then the
forex traders who go on to achieve greatness:
(a) Monitor the markets and start trading again but trade small amounts
and don’t force trades, they then resume trading normally once they get
back on track.
(b) Wait for market conditions that suit their trading style.
This is an important process to go through. Most traders go through this
experience 2 or 3 times before they develop the skills to achieve their
trading objectives.
Trading success is a result of consistency, discipline and patience and
most importantly self belief… When you have a trading plan that involves
clean price action strategies, and that is built on practical workable
parameters and it suits your personal and financial requirements, and you
stick to it, then your forex trading will become more enjoyable and more
profitable.
Forward this letter to any forex trader you know. Aspire
to Inspire, Before You Expire!
