Sunday, November 9, 2008

How to Avoid Fail as A Forex Trader?

"Define first the level of risk you dare assume. Start with a small position, and then build it up if it works" – George Soros

"Give me a stock clerk with a goal and I’ll give you a man who will make history. Give me a man with no goals and I’ll give you a stock clerk" – J.C. Penny

"If you go to work on your goals, your goals will go to work on you. If you go to work on your plan, your plan will go to work on you. Whatever good things we build end up building us." – Jim Rohn

It is a sad fact that 90% of forex traders fail, and many very quickly give up. Why? When we went through a phase of losing trades we treated it as a temporary setback and went back to the drawing board. We analysed the reasons of our failure and we sought the guidance of Top forex traders, Mentors and Coaches to put us back on the path of success and profitability.

In our opinion the high rate of failure for a new forex trader can be related to the six major obstacles that a forex trader faces, which are summarised as follows :

  1. Poor Skills
  2. Lack of adequate capital
  3. Setting unrealistic targets and goals
  4. Lack of Patience
  5. Lack of discipline
  6. High risk aversion.
If we look at the list, it becomes apparent that the failure is as a result of forex trading without having in place a proper forex trading System and a forex trading Plan– One that includes mind training, quality Forex education and strategies and sound money management rules.

So what are the Characteristics of a Successful forex trader? All we have to do is to reframe the liabilities listed above.

  1. Adequate forex trading knowledge and understanding. You should seek services of good quality mentors and a forex trading coach.
  2. Adequate capitalisation – Don’t be fooled that you can earn thousands every week from a starting capital of $500.
  3. Realistic Goals – don’t expect 100% profit each month, it simply is not possible.
  4. Have patience – don’t trade if you don’t have to. You should wait for a set-up according to your forex trading plan and system.
  5. Have Discipline to follow your rules.
  6. Understanding and Managing Risk.
  7. And lastly the most important is having a forex trading System and a forex trading Plan.
If you look at the advice from the world’s most successful people or forex traders today, you will notice that they follow the guidelines as identified above.

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