You don't have to have a big success rate to make money trading the Forex market. Most success full traders have failure rates of between fifty and twenty five percent. How frequently would you trade if you knew that you make one thousand dollars for every 100 trades you make in spite of getting forty five percent of those trades wrong?
If you add up all the losses made by a successful trader (in dollar terms) the losses are often much larger than the gains or losses made by an unsuccessful trader. Therefore good Forex traders are not only the bigger winners but also the biggest losers (in dollar terms). Trading activity is sometimes much more important to trying to get a hundred percent record all the time.
There are many explainantion of this. Good traders have accepted the fact that losing is part of Forex trading. They therefore process and accept loses in a very positive way. They are not distracted by loses or become emotionally upset. They view their losses as learning experiences and therefore get great value from loses. They also know that a trader's success rate is only one of the components to a financially rewarding Forex trading career. They know that to succeed it take a balance of many trading skills and factors. These factors include good money management, a positive and objective trading psychology, how much profit you make on gains, how much you lose on losers.
Using this constructive attitide allows them to trade more often (Not talking about over trading) as they are not distracted by trading psychology problems such as depression and paralysis. They are also more confident at increasing the number of lots traded based on their past successes.
Money Making traders are more active and trade bigger trades. Not only do they make more (in dollar terms) on their winning trades but at the same instance they lose more on their losing trades because their size of of lots are slowly increased.
Because of their ability to not deal with losses very well unsuccessful traders don't risk as much on the deals as they become so cautious. This increases their insecurity and gives them a trading inferiority complex. Most unsuccessful traders are so distracted by their losses that they start their quest for the Holy Grail over and over again every week.
You can save so much energy and time processing your losses positively. Almost all trading techniques can be made to be profitable by adding a number filters anyway (or reversing the trading direction on unsuccessful systems) so the trading system is the easier part.
Poor traders lose cash due to poor (or no) money management and having an inappropriate trading psychology (which includes how losses are accepted by the trader).
Good traders lose money because it is part of trading (the market will always do what the market will do) and they don't lose any sleep about these loses. How well do you deal with your trading knocks?
The biggest difference between successful traders and unsuccessful traders is the ability to deal with losses positively.
About the author:
Learn how you can make money from Forex Trading by tapping into Mary McArthurs experience by visiting money making Forex alert services or by going to free Forex trading services. Visit Make Money by being a Forex Loser. |
