Forex Trader

Why do 95% of people who choose to enter Forex, lose their money? Is it because they lack inside knowledge, a "hot tip"? Or maybe they don't know the latest "system", based on so many indicators it makes your head spin? Let's find out.

A successful Forex trader always employs a certain mindset. It could be described as indifference to the market - it doesn't matter to them if their trades are in the red, or in profit - as long as a trade is within their system and risk tolerance, they sit out both and wait for proper exit conditions. Amazingly, most successful traders employ very simple trading systems. What's different about them, is that they are calm and focused, and always following their trading plan.

Traders that lose money, on the other hand, panic once they see their trades going in the red, and close their winning positions too early, denying them serious part of the possible profit. Losing traders do not have a consistent system - instead, they take a trade here and there, they try to "catch falling knifes" (in Forex jargon that means trying to catch a dropping or rising price, without any sound reason). They also tend to risk a lot of their investment capital per one trade, and that leads to panic or even margin calls (if you're using too big of a leverage).

There are a lot of books written on the trading psychology, but the most important advice can be condensed in 3 simple tips:

Never, ever risk too much on any particular trade - how much exactly do you risk, is up to you and your risk tolerance, but better to be conservative and live to trade another day. If you risk too much, you will exit winning or losing trades way too early, and potentially even turn winning trades into losing ones just because you couldn't stand a couple of minutes in the red.
Always be aware what the market is doing, but don't overreact to any single movement - you must at all times strictly adhere to your trading plan.
Have a system (and a simple one at that) in place, which you can trust - first, test it real time on a demo account for couple of months, and once you trust your system earns you money over the long run, put it in use on your real account

As you can see, the main points are to trust yourself and your trading system, and don't risk too much on one trade so that you can make stable, sound trading decisions.

I have traded currencies for some time already, and I'm still profitable. I'm not one of these outsourced writers who just do "research" on Google and chug away word after word, article after article. So check out Forex Trading Tutorial for a product that I do actually recommend.

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