For many people the idea of Forex trading from home is extremely appealing. To be able to work when you want; to be your own boss; and even make some pretty decent money, is to many a risk worth taking. However, the reality is that although people start off with good intentions, many soon find that their Forex trading ventures are pretty much short lived. Why is this?
Searching for the Holy Grail
In the very early stages of a career in Forex most trading decisions that a new trader will make comes from alert services, recommendations from brokers, advice from forum threads and even from more experienced trading friends. Then at a certain point, they decide to study the markets for themselves to get a better understanding, or try to find the perfect trading platform or system. For many, this can become an obsession that can take up endless hours of trawling the net trying to find this so called ‘perfect system’. Whereas, in reality it simply does not exist.
Trading Before You are Ready
Another reason that people fail is that they buy into a trading system and start to trade far too soon when they are nowhere near ready. On some occasions the system will be profitable, however problems arise when they start picking up a few losing trades (which is the norm). When this happens, they end up ditching the trading program, in the search of something fool proof (which as we have already discussed simply doesn’t exist). Many will go into what is known as ‘analysis paralysis’ whereby they will keep going back over where they went wrong and constantly over analyse. In addition, they will question every trading decision that they make and end up never actually making a trade.
It’s All in the Mind
There are a few traders who switch on to the fact that their trading system is not actually the problem and that the most important aspect of their trading is actually the human mind. It has been proven that many successful traders can turn a considerable profit with even the most average of trading systems. Why? Simply because they don’t let their emotions get in the way of a trade and they are rigid in their trading plan and never deviate from it. If you flip this on its head, a new trader can have the almost perfect trading system but will still fail to make money if they let their emotions take hold.
In essence, statistics have shown that when a rigid trading system is developed and trading skills have been learned, around 80% of people actually start making money. It is also important to note that even the best traders make losses, but what makes them stand out from others is their ability to carry on regardless with their unshakeable belief in their trading system.
There are four factors that make a good and successful trader and they are:
If you can master these then you are well on your way to trading success.