Secret to Success in Forex

What it takes to succeed in forex trading is the guts to keep
going and the smarts to have enough money to last that long.

Let me explain.

You see most traders blow out accounts (rather small ones)
rather quickly. Then they re-fund the account and start all
over. It's madness.

If you're account is too small, you are fighting an uphill
battle. No, it's worse. It's like trying to fight and scale a
cliff at the same time. It's not going to happen.

Drawdowns happen. You need to have enough money to make through.
You need to have the smarts to preserve your capital and not
chase bad trades during this time. How do you learn to do this?

It's one of those things that you learn by doing. You can't get
it from a book or course. So how do you not lose a fortune in
the process?

First, make sure that your account isn't too small. Anything in
the hundreds of dollars is too small (if you're base currency is
something other than US dollars, convert to get the numbers for
your currency).

Don't even think of trying to trade with less than $1000 USD.
And don't even think of trying to trade with money that you can
lose and then shrug your shoulders. I remember one business deal
I invested $17,000 into. I lost it all quickly (it was a bad
deal).

I didn't need that money. It wasn't a big deal to me. I shrugged
my shoulders and said, "oh, well." I also recovered the money
quickly from another deal. However, if it had been a problem to
lose that money, I doubtless would've lost more not made it
back.

It's funny that it works that way, but it does.

So, (and I know you've heard this before) only trade with money
you can lose. And only trade with an account that is a
sufficient size.

Make sure that your trades are as small in size as you can make
them (and still be following your system).

As long as your account is large enough, your trades are small
enough, and you have a system that works (see lesson one if you
don't), then you will make it as a trader if you stick with it.

You see, you're as bad as your going to get right now. You can
only get better, and you will, if you do things right.

So what does it take to succeed in forex trading? Perseverance
and intelligence. You can do this. You can do well at this. Stay
the course. The end is a pot of gold and it is really worth it.

How To Avoid Losing Money In Forex

Perhaps the biggest reason people fail in forex trading is
because they can't seem to take enough winning trades, right?

Wrong.

The biggest reason people fail trading is because they don't let
their profits run.

Sorry. Still wrong.

Because they attempt to day trade.

No, that's not it.

Most people who fail in forex trading do so because they trade
with too much leverage. Trading at 100:1 is asking for trouble.
Why do the brokers advertise it so heavily?

Because it's good for you? Because they have your best interests
in their heart? Because they make a lot of money when you do?

No.

Most brokers trade against their traders because they know that
most are losers. So all they have to do is take the opposite
side and over time they will be net winners.

Shocking? Disgusting?

I don't think so. Don't hate them. You'd do the same if you were
in their place. Sure, if they truly cheat or steal, that is
another thing. But don't hate them just because they are trying
to maximize their money.

Back to the main point. Too much leverage will kill you. Do you
realize that at 100:1 (the most common leverage offered) you
will be wiped out if the price moves just 1% against you (if you
have no stops in place).

At 200:1 leverage just 1/2% of price movement against you will
empty your account. In truth, you shouldn't (in my humble
opinion) trade at higher that 10:1. In other words, ten cents
would control one dollar (or whatever currency is your base
currency).

Let's backtrack. If you noticed above I said that you wouldn't
be wiped out at 100:1 leverage if you have stops in the market.
If that is the case, then what is the danger? Just make sure you
have stops, right?

No.

The percentages still hold true. At the higher leverage the
market may only have to move a hundredth of a percent to take
out your stop. All the market has to do is hiccup, and you're
out.

On the other hand, if you've got your leverage small, you can
give your trade more room, because each pip is worth less. More
room means the market can move against you before moving in your
favor.

How many times has the market touched one of you stops (taking
you out of the trade), before moving in the "right" direction?
That wouldn't have happened if you'd had been less leveraged.

Leverage kills traders. Repeat that. Over and over.

How to make money in forex

If I could sum up forex trading in 5 steps, here's what they'd be.

1) Rid yourself of the get-rich-quick mindset.
2) Use a simple system (that works!).
3) Practice.
4) Practice some more.
5) Enjoy the fruits of your labor (in other words, make money).

Let me explain each one.

Rid yourself of the get-rich-quick mindset. There is a disease that most of the people looking to better themselves have. It's "make a lot of easy money fast" disease. It comes
from reading too many books full of hype and too many infomercials.

It will destroy your ability to make significant money at anything, especially trading. Yes, there is a lot of money to be made in the forex market. But you're not going to make it your first week, or your first month. You might not even make it your first year.

Does that discourage you? If so, you are a sufferer of this disease. Believe me; the goal of making money by trading forex is very attainable. And it is worth the effort. $$$

But you are going to have to commit yourself to doing it right, if you want to do it successfully at all. Are you with me? Good. (You have just been cured.)

Next you need a simple system that works. Nothing is more discouraging to a new trader than to be doing everything right and still lose because of a bad system. Furthermore, a complicated system is another sure route to failure. It must be simple.

So, how do you tell if a system is good? It can be complicated. Here is the easiest way. Ignore income claims and backtesting results. They are worthless. First they are easily faked. Secondly, many systems that backtest well blow up in real trading.

Stick to old systems that are proven through out time. I'm talking about Fibonacci retracements, Bollinger band squeezes, etc. You can learn all you need to about these methods for small amounts of money (if you don't know already). Save your $997. You don't need the latest and greatest automatic trading system. Fibonacci still works. It will most likely work until the world ends.

Now you practice. There are hundreds of forex brokers that are hungry for your business. All are willing to give you free demo accounts with free charts. Sign up for one and practice.

Enter demo trades just as if they were real. Don't worry about winning or losing. No one is going to see your trading record. Prove to yourself that you can follow the rules.

Guess what? Step 4 is more practice. Why? Because you didn't do step 3 right (which is to practice). You didn't follow the rules. You didn't take trades when you should have. You exited early to grab profits. You did, didn't you? (Hey, it's okay. I've been there and done that.)

So practice some more. You can do this right. You can make money trading forex. I know you can. Just follow the steps, okay. Practice.

Finally, you've reach the last step. You've practiced. You're following the rules. You're actually picking winning trades, and your account balance is larger than when you started. You're ready for real money. You're going to get rich!

Whoa!! Let's not get that easy money disease again. Things will be bumpy when you first start using real cash. However, you know what to do. If you do it, you will make money. (Read the last two sentences again and let that sink in.)