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Learn Forex Trading / Currency Trading Tips
How
to Guarantee Failure in Forex Trading
Forex trading – it’s one of the most exciting
new ‘games’ in town. The stakes are variable enough that almost
anyone can play, and the potential winnings are high enough
to tempt even the most conservative into the running. There’s
something romantic and dashing about trading in money – a cachet
that stock, bonds and mutual funds just don’t have. With trillions
of dollars changing hands everyday, it seems like everyone’s
got a fail-safe method that will make you rich overnight. Here
are nine failsafe facts that will guarantee that you fail in
forex trading.
There is a failsafe method to make money on every trade.
Just like there’s no such thing as a free lunch, there’s no
such thing as a failsafe method. You WILL lose money on some
trades, it’s inevitable. Expecting to always win is a guarantee
that you will hang on to trades long past the point that an
experienced trader would have found an out.
You don’t need to know anything about the market to make money
in it.
Not knowing your playing field is a sure way to hit every
bump and hole in it. It’s not enough to read a few articles
from your dealer. You need to make a concentrated effort to
understand the forces that drive the market so you’ll know
the best times to make a move.
You can play a winning game by making frequent trades with
small profits.
If your goal is to make a few hundred dollars a day, you may
be ahead of the game, but you’re seriously limiting your profit
potential. The only people getting rich on frequent tiny trades
are the dealers taking commission on them.
You don’t need a plan to make money in the currency market
– making money IS a plan.
Trading without a well-thought out plan is like jumping out
of a plane without a backup chute. Your plan is what keeps
your eye focused on your goal, and gets you through the inevitable
losses. Currency trading isn’t a short-term game, but most
new traders (95%) quit within the first year because they didn’t
have a plan to follow.
If you stick with a losing trade long enough, it will turn
around.
Sticking with a losing trade is a good way to lose more money.
When a deal isn’t going the way that you expected, it’s hard
to admit that you were wrong and get out – but it’s the best
way to avoid losing even bigger money. Winning on one trade
isn’t going to make you rich overnight. Consistently knowing
when to get out – whether it’s to cut your losses or grab your
winnings – is the way to be a successful currency trader.
Where there’s smoke, there’s fire.
Rumors are just that – rumors – 99% of the time. If you want
to win at the game, base your trades on reality, not hearsay.
On the other hand, rumors can alert you to look at what’s really
happening and make a decision based on the movement that you
see.
The more currencies you trade, the better your chances are
of scoring a big profit.
The more you know about a currency, the easier it is to predict
how and when it will move. The more intimately you understand
the way it behaves, the better your chances are of consistently
making successful trades in that currency. If you’re trying
to focus on too many different currencies, you’ll be spreading
yourself too thin to really get to know any one of them.
Thinking long-term and trading short-term is a sure way to
make money in the long run.
That’s one of those logical fallacies that sound good on the
surface. Look at it more closely though. If you’re trading
in the short term, then you need to keep your eyes on the short
term rather than trading to what you think the market will
be in a week. Today is today – if you make your best trade
today every day, you’ll consistently be ahead of the game.
The way to make money in forex is to always have a trade in
motion.
Sometimes there just isn’t a trade that’s going to profit
you. Making a trade just to make a trade is a sure way to do
yourself no good – and possibly a great deal of harm. # # # # # SolveYourProblem.com : 2007
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