Good day everybody.
Welcome to my new series for friends who are new to forex trading.
At the end of this series, my aim is to help you embark on your journey of forex trading. To foster the right mentality and style.
I call this series, Learn Forex The Right Way Series.
Today with part 2, i am going to touch on the various myths and truth of forex trading.
Now something must have prompted you to start your forex trading. Find below the myths and do consider again if you are starting because of these.
- Making money in forex is easy
Contrary to this, surveys show that 95% of forex traders lose money
- Forex is a way to get rich overnight
If this is indeed true, no one will be having proper jobs anymore
- A small deposit is good enough to make big money
If you open an over sized position for your capital, expect to face the horrors of a margin call soon
- There is this “insert any absurd promise of a huge gain in a short period of time” trader / system / expert adviser i can follow
There is NO holy grail for forex expect for proper money management. The forex market is an ever changing market. No one or system or expert adviser can ever predict with 100% accuracy
There you go. Consider this a wake up call if you are indeed starting forex trading along the lines above. I have suffered THREE margin calls before. These myths above were once my thoughts too. If you decide that making money in forex is easy based on the above, it is no better than a trip to the casino.
Alright. Away with these myths, what is the truth about forex trading then? Are we destined to lose our money?
The truth is we can make money from forex trading provided we do so in the proper way.
- Making money from forex trading requires patience, discipline and hard work
Proper money management is a must and discipline is needed to adhere to it. Expect time committed to reading articles and global news. Forex is a global market with many push and pull factors
- A gain of 10% in a week is phenomenal !
Mutual funds in a good year gives you that only after months. Be realistic
- Not every trade is a winner
Expect to make wrong trading decisions and have the discipline not to let losing trades run beyond your stop loss. Planning your trades well is important and this is where proper money management will save your forex account for another day
- Not trading at times can be a wise position
Do not suffer from obsessive trading disorder. The constant urge to trade will result in failure one day. When the going is not right, stay on the sidelines. The market will always be there
- Success in forex trading is a constant learning
You can never reach the top, the peak, the holy grail or whatever! The market changes constantly and our learning of that continues on constantly. Slow and steady profits is the key here
If you find the truths above reasonable, logical and something you can practice strictly, i will say you are off to a good start!
Remember there is no guaranteed success in forex but with the real mentality and attitude, the chances of success will be high!
In the meanwhile do check out our forex forum where you can find discussions of popular topics such as the EUR/USD.
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