Categories: Forex Trading Strategies
The top statistical reason forex traders cannot hold onto any profits they make is over-trading. Let’s face it, forex brokers make money based on how much trading you do. The more you trade, the more money they make. So what is their objective? To get you to trade as frequently as possible.
How do they do this? They pummel you with as much free information as they can. The majority of this information is useless for trading any currency pair on a day to day basis. So how can you, the forex trader, keep those profits? Cut back on the quantity of trading you do. Once again, it is statistically shown that the trader who minimizes the number of trades he places will hold onto his profits for a longer period of time than the over-trader.
How do you accomplish this? By learning that just because you are in front of your computer does not mean there is always a solid trading opportunity in front of you. The solid, consistent trader always trades with the mindset of “always look for a reason not to place a trade”.
Keep in mind, all a forex broker is is a salesman. That’s it, pure and simple.
The gambler goes into a casino with a fistful of dollars ready to bet, relying solely on hope and luck. No plan. No process. No system. He is not a professional gamer who works with a tried and true system. He is a gambler, at best armed with some bits and pieces of free information that he has gleaned from the internet, e-books and friendly advice.
This is the same description of 80% of the forex traders that are out there. They turn on their computer, log into their forex trading platform with the sole mission of firing off a trade ASAP. The two key factors they are relying on are the same, hope and luck.
Let’s say you want to become a professional gamer. Let’s pick poker. What makes more sense? To get free lessons from a casino? Remember, their mission is to get you to the table and betting as soon as possible. That is why they offer free lessons. The casino knows that by enticing you to start gaming ASAP means the sooner they start making money off of you.
Or, seek out paid-for training from a professional poker player? Certainly there is a financial commitment, and a time commitment. But a much higher probability that you will move onto become a successful poker player.
All a forex brokerage firm is is a casino. With the same initiatives as a casino, they offer free training to get you to trade ASAP so they can make money from the transaction cost.
You want to be a solid, consistent trader? Seek out professional training. You know the old saying, “you get what you pay for”. So do not expect to make thousands and thousands of dollars from a $500 training program. Look for a solid, professional forex training program with positive ratings when you do a Google search.
The concept sounds simple and obvious. However, most forex traders never think from the paradigm of preserving capital first. All they want to do is trade. Another cardinal rule of the consistently profitable forex trader: Plan your trade and trade your plan. The forex trader who ends the week, month and year in the positive knows exactly what he will consider trading and what he will pass on. Just like that professional poker player.
The professional poker player does not bet on every hand. He waits for a high-probability hand to come his way before he is willing to put his money out there. He works from the premise of “preserve and grow your capital”. The professional forex trader does the exact same thing; he waits for a high probability trading setup to develop. No solid winning setup, no trade.
How does he learn to identify a winning trading setup? By paying for professional training.
The gambler is always looking for the get rich quick scheme, the holy grail, the magic formula, which we all know does not exist. He is looking for immediate gratification, instant success.
The reality: If the hype around a product or program defies common sense, then it is simply too good to be true.
The bottom line: There is no secret on how to become a successful forex trader. Successful forex traders understand that learning how to trade is no different than learning any other discipline. Follow the tried and true path of getting solid training.
