If I study hard and learn as much about Forex as you can, why do I still fail and lose money?… There are so many tools available. Signals, robots, calendars, it seems endless. I’m just now trying to learn the Forex market and quite honestly I’m confused.
Pretty good question. Let me give you a similar question from real world perspective. If i study hard and learn as much about car driving , why do i still fail and crash my car?
Answers could be
- depends upon your driving skill
- which car you drive
- speed of driving etc… i hope you got the point.
While you drive the advantage is that you could see the oncoming truck, the twists or hole on road . This helps you in deciding various risk reducing mechanisms like speed, direction etc.
Forex trading is similar to driving a car. Its just that you will be blind folded. And you have to face that same oncoming truck, that twist in road or a hole. And for obvious reasons the parameters wont match up.
1)- Check out your previous trades history. Most likely you have let your losers run for infinite time period while; in case of profit, you exit a position in just 2-3 days at max.
You have the talent in you. Just trade against your brain. What if you would have done just opposite to every trade that you have made? you would have been in profit ofcourse. its all in brain.
2)- When you enter a trade and its earning profit, only concern would be when to book profits while; when it goes against you, only concern would be adding more lots inorder to average your buy price. This increases your risk by 400% , when compared to your linear prof scenario.
I have developed this amazing model using which we analyse this trade patterns. Then categorise every trader as
- Profit maker
- loss maker
Profit makers, as name suggests make consistent money. And, my model identifies tham and we just follow them.
Loss makers, are the largest group in this pond. We reverse them .
Random Traders, well we wait until they start making some pattern.
What You need to know is: Affective neurosciences
Who You are: if You don’t know who You are, markets are an expensive place to find out. Trading will ellicit the darkest corners of your mind. Be prepared to face and walk through your ugliness. Once You walk through your fears, you will realise they were just mental blocks. It is infinitely liberating. 95% of trading success is mental, the other half is only repetition.
Three qualities you must develop:
- Learn to accept losses: You will be right and lose money. Like poker, you bet and sometimes you lose, nothing personal, just accept and move on
- accept uncertainty: this is the amygdala firing away. Uncertainty is, sh…t happens, live with it
- Equanimity: great traders, poker players and street hookers have one thing in common: they go to work, it is not meant to be fun
read Van Tharp, best resource out there. I will resume publishing soon. Sorry, I have been busy upgrading our strategy.
The only time when You know if You made money is when you close a position, so focus on that
I hope you got your answers . I have 9 years of forex markets experience and been a successful trader.