You have probably heard that you can make millions of dollars trading Forex and get super rich overnight. But the brutal truth about the Forex market is that 90% retail traders lose money! And you only earn when someone else is losing. So, you don’t have the luxury to follow what others are doing and instead you should avoid those 90% of losing traders and what they are doing.
Losing traders are always busy finding how to win, which of course is important to know but I can guarantee that everyone will have bad and losing trades. How you react and stay focused during that time really matters a lot.
It sounds strange to say, you have to learn how to lose properly. Nobody likes losing, especially money. But you have to take action and repair the holes in a sinking boat or it will sink no matter how much water you pump. Faster you take action, better the chance you have of surviving. You have zero chance of surviving If you can’t find the leaks. Take our price action course, how to take less loss is one of the primary part of our course.
Trading in the Forex market is the same. You have zero chance of surviving here if you can’t find out what you are doing wrong and how to handle them. You are not yet successful because you are doing something wrong. You need to find it and correct it. So, focus on your losses and try to find why you are losing and keep the note in your trading journal.
There is no difference between a winning or a losing trade to a professional trader. No dignity on a winning trade and no humiliation on a losing trade! It doesn’t matter, only thing matter is how much you are making when winning and how much giving away when you are losing. You don’t have to take it from me, let’s see what Mr. Stanley Druckenmiller who is the second most successful Forex trader of all time says about the number one Forex trader!
“I’ve learned many things from [George Soros], but perhaps the most significant is that it’s not whether you’re right or wrong, but how much money you make when you’re right and how much you lose when you’re wrong.” -Stanley Druckenmiller
So, losers aren’t trying hard enough, right?
This might be true for other professions but not in Forex trading! Looking and trying too hard for a trade would bring you opposite result. The practice of ‘getting rich quick’ will only make you poor, fast. Over analysis is paralysis in the trading world. It indicates you need to profit a certain amount of money within a specific period of time if you are looking hard for an entry to make money.
And this kind of pressure will pollute your trading decisions. There could be many months where a professional trader won’t be making money! They know it and accept it as they always trade defensively and focus on not losing the risk capital.
The first thing about trading is, it is an investment, and you shouldn’t depend on it for a living. The purpose of an investment is increasing wealth not earning money for bread. I am not saying you can’t trade for a living; all I am saying you shouldn’t think like that. It could hurt your credibility as a trader and make you emotional on trades. Feeling pressured to make profit would actually heighten your loses. More losses will push you to take a revenge on the market. Show me a single trader who were able to take revenge on the market for 2-3 months consistently. Revenge trading is the recipe of the loosing a trading account.
Successful trading is a process of following rules/strategy:
Successful trading is the result of a long journey by improving your skills and habits being patient. Successful traders always know how much they are going to risk and why take the trade, but their profit target could change by the course of an upcoming price action chart, risk & reward could be changed from 1:2 to 1:3 if such price action comes. But under any circumstance, they don’t change their risk reward to something like 1:1. Personal favoring or marrying a particular trade outside of your normal conditions would affect your money management. A professional trader never practice such; they treat all trades equal.
Winning or losing is not a good or a bad thing! You can lose from a good trade setup and win from a bad setup. It is the trade quality and money management that all matters. Your money management will help you from losing big from a bad setup. Being wrong is not a bad thing but keeping that wrong alive once you have identified is a crime in the trading world.
“Once we realize that imperfect understanding is the human condition there is no shame in being wrong, only in failing to correct our mistakes.” – George Soros
To make profit you don’t need to win all the time! Trading is not about getting right on every move, you can’t win every trade with every move in the market, you just need to accept this. Nobody in the trading world can do that. Warren Buffett loses on trades, George Soros loses on trades, don’t let your ego burn your trading capital. You need to master the art of patience which is a virtue by choice. Successful Forex trading is a process, not a project. Be defensive and protect your trading capital.
How many trades in a month?
How many winning trades you have each month, what is the winning ratio or how many hours you trade is irrelevant in trading, you need quality setups. You can’t move the market so there is no other way but to wait for the right setup. Try to buy cheap and sell higher. Try to find the base value of the currency which central banks are looking for and stay on trends by following key levels. Trading is actually boring and which is a great thing in the Forex market.
Profit is the byproduct of losing less in trading. You can’t possibly be in profit if you lose bigger most of the time! You will only lose less once you repair your mistakes, losing less will increase your profitability. There is no other way.
It is your turn now! Please let me know your thoughts in the comment section. Share the article with your social networks. It inspires me to share more with you guys!