Over the course of time many people have tried their luck in retail forex trading. Many of them failed and never return again to the market while the rest of them that stayed finally leave the market for good several years later. Only a very small minority left and they are the ones making consistent profit from trading activity. Is forex trading that hard? Why do people lose so much money over the course of their trading activity? The answer is they are obviously not doing what the successful traders are doing. However, that’s an oversimplified answer because there are factors that are responsible for the lost of money.
Forex trading is a business and as a business you can only succeed if you prepare yourself for it. Here are things that you can do to really make money in forex trading:
1. Get the right mindset.
This is the first and most important thing before anything else. You should know and understand that forex trading is not a business that can make you rich overnight or over a month or even a year. Forex trading is a business, a tough one and as with any other business you will experience down times during the course of time. So if you are not patient enough to endure the difficult time you better stay out of this market. You must also have the correct attitude. Why? The reason is you will have to adjust yourself to the market and not the other way around. In forex trading, you can only make money when there is an opportunity to make money and you certainly can’t make money out of nothing in this market. So, contrary to what most people say, this business is not a flexible business at all because you are not the one who can set your own schedule to do this business as in internet marketing. Yet, forex trading can be called a flexible business because while you are waiting for the opportunity that the market will give, you can do other things. The last but not the least is you should not leave your job for forex trading. If you are just starting out in forex trading it is far better to trade forex part-time. Forex trading have the potential to make you big money but it will not happen immediately. It will take some time before you can make profit that can sustain your living so don’t quit your job yet. Some people still don’t leave their day job even though they make more money from trading than from their day job. The beauty of forex is it does not require you to quit your job.
2. Find yourself a mentor.
Do yourself a favor by not running around to forums or websites to look for trading method or holy grail. The common sense is something so valuable will always have a price on it. Nothing is absolutely free. A great trading method might be available for you for free in some forum but you will not find the full explanation from A to Z about it over there. Moreover, even if you get the information for free you will not find a full guidance on how to trade using it. Also, you will lose energy, effort, money and time if you go from one forum to another. Do you want to know why? It’s because you will have to try the trading methods one by one which will take time, effort and energy and also money (if you do use those trading methods one by one in your real account). Money can be replaced by time is something not even a trillion dollar can buy back. As you can see, the loss is far greater than the benefit.
3. Be discipline.
Discipline is needed if you want to run a profitable business, any kind of business not just forex. People usually lose money because they are not discipline enough to follow through a program or trading plan. For some people, discipline is not an issue but the same cannot be said for all people. It is important to follow the trading plan/trading method with strict discipline unless told otherwise. It takes time to build a successful business and you will not be able to achieve this without a strong discipline.
4. Be strong during drawdown.
As mentioned briefly before, a trader must be able to weather the storm. Forex is not a job that will deliver “salary” in time every month. You will face periods of losing streak during your trading activity. Most people will change their trading method when they see that the trading method fail to deliver profit on every closed trade. Or maybe they are not strong enough to see their money depleting during the losing streak. One thing that you should know is there is no trading method that can deliver perfect trades every time. A trading method have strengths and weaknesses so be sure you understand your trading method and try to avoid trading using it during unfavorable market conditions.
5. Contact your mentor if you still experience problems with your trading performance.
If you have done your part and still not see improvement in your trading performance then it’s time to ask for help from your forex trading mentor. A great forex mentor will help you solve your problem or answer your questions regarding the trading method that he designed. And the good thing is they usually have a support community where their students gather and share experiences about the problems they face.
There are other things that are not mentioned in this article but the five things that were mentioned above are the most important things that you must know. Other people will say that forex trading is hard or they might even associate forex trading with gambling. People around you will say different thing about one subject and it’s mainly because they experienced something bad with it or they simply don’t know what they are talking about. Usually they might change their opinion once they see that you really make it in this business. It doesn’t matter what other people might say about forex trading the fact is there are people making money from it and you can have the same success if you follow in their footsteps.