As the economy becomes tougher and Lockdown measures have a bigger effect on people’s finances, more and more people ask about Forex Trading as a way to generate money.
It scares me. In a way, it is like somebody asking about betting on horses or sport as a way to generate an income. It is as if I can hear people say: “But Forex is different!” My sobering (I hope) answer would be a question: “Who, other than the Bookies, make a consistent, good income from the races or sports? How many people make a profit trading Forex?” I think brokers have to disclose risks, so you will mostly see that “more than 70% of people lose money.”
So you should not trade Forex?
No, that is not what I am saying. What I am saying is that gamblers don’t gamble! That may sound strange. But it is true.
If I play the horses or put a bet on the outcome of a rugby match, I gamble. I do not have the slightest idea of what I am doing. Real, professional gamblers do not do that.
- Do not focus on the jackpot – hitting the jackpot is a bonus. They are satisfied with smaller, consistent profits.
- Know the rules of the games (the sport they are betting on AND the rules of the betting game) inside out. And they use that knowledge to increase their chances of winning.
- Know and understand the odds. They understand what their chances of winning is an adjust their plays to the odds.
- They have enough confidence in their system that they do not lose faith when they hit a losing streak.
- They do not become emotional over winning or losing. It is not one lucky or five unlucky bets that make the gambler, it is the profit or loss over time. Some you win, some you lose. If the strategy works and you stay in the game, you will win.
- They know as long as the winnings are more than the losses, they make a profit.
So I am not saying you should not trade.
Is what I am saying.
The difference between a golfer, an amateur golfer and a professional is the number of balls they hit per week.
The golfer may play a round every now and again. The good amateur will spend at least an afternoon a week on the driving range, perfecting his swing, hitting one ball after the other. The weekend golfer may hit 100 shots in a game, the good amateur hits a few 100 shots in an afternoon so that he only hits 80 in a round. And the professional? He does what the amateur does once a week every day, and he hits 68 strokes in a round – under par!
The professional is not influenced by his last bad shot. He puts it out of his mind and hits the next shot perfectly. The professional does not try to “make up distance (a loss) by hitting harder on the next shot. He plays each shot on merit.
That is what it means to be professional!
If you want to succeed as a Forex trader, you have to be a professional.
How do you become a professional forex trader?
You learn. You put in the time that it takes to study Babybips until you know it by heart. When the quizzes get difficult, you do not skip over it, you redo the lecture until you score 100%. You do not go to the next lecture until you have completed the current lecture successfully.
You learn the rules of the game.
Both these courses are free and adds good value. It will at least give you a foundation to get started and later evaluate a paid course.
And then you do what all pro’s do – you practice. You hit a few 100 balls for every one you hit in the game.
In Forex language, you put in a few 100 demo trades for each real trade that you open. And you do not open a real trade until you know you can “hit the ball successfully most of the time.”
That is the secret of success!
Unless you have a very good record on your demo account, you cannot have confidence in your strategy and what will happen? The moment there is a loss, you doubt the strategy.
The moment you doubt the strategy, one of two things will happen:
Either you start messing and tweaking and adjusting your strategy to the point where it is unrecognizable,
you pay somebody (more money) for a new strategy.
And you repeat the process until you run out of money!
Until you become professional you will repeat this process and probably lose a lot of money.
Nobody really knows how many people really make money consistently with Forex trading. But if you want to be part of that elite group, you have to invest time and put in a lot of effort to study, learn and practice, practice, practice makes perfect.