If you’ve been around forex for sometime, you must have heard the popular saying “95% of traders don’t make money in the forex market and are most likely to blow their trading account within the first 6 months of trading”. If you ask me, I would say that this statistics is very alarming.
If you take a survey of this unsuccessful traders, you will realize that many of them fail not because they aren’t knowledgeable enough, on the contrary many of them know quite a great deal about the market behaviour yet they still fail to bank those pips month after month instead,their account keeps shrinking and shrinking until one day, they get a margin call. “Game Over”.
One major trait any trader must possess if he/she is to make any money out of the forex market is to have the mindset of a successful trader. “It’s that simple” but it does not come that easily, you have to work on deliberately becoming a succesful trader. Now how do you do that? Well, that’s what you are about to learn so Relax.
After a lot of reading, researching and my own personal experience, I was able to come up with 3 steps you must follow on your journey towards acquiring the mindset of a successful trader.
1. Never trade with money you cannot afford to loose.
Straight forward enough, isn’t it yet a lot of us still fall into this same trap over and over again.
Many people who trade forex today get into it for the wrong reasons most because of the enormous wealth it could bring them. After reading some hyped up sales letter of some dumb guy selling some dump black box system they claim can turn you to an over night millionaire, they buy into this scam and probably fund their account with money meant for feeding, school fees, accomodation or even for paying bills hoping to make it back in hundreds of folds, what then happens to such traders? They start trading on their emotions entering trades they should not be entering and missing the trades they should be entering. It will not be too long before such traders end up blowing their trading account.
If you have not understood what I have said so far, understand this “Trading based on emotion is the no 1 killer of of any trading account” this is so because of the traders fear of loosing, forgetting that forex trading is nothing but a game of probabilities and all it takes to win is having the odds tilted slightly in your favour.
2. You have to be willing to accept the risk
Not accepting the risk is another reason traders fail seriously in the market you see, It is not just enough to place a stop loss. Placing a stop is the first part, But do you really see yourself as a risk taker? do you realize that there are chances that your trade could be a looser? One thing you must know if you must succeed in forex trading is that any thing can happen at any time. You don’t need to know what is going to happen next to make money because once you have a system that wins over 60% of the time you know will always turn out profitable end of the month.
You must recognize the edge your trading system gives you and learn to use it to your own advantage and not against you. Don’t be afraid to take risk because without taking risk, there can be no reward.
3 Think In Terms Of Pips Instead Of Money
This is another point I’m going to be stressing on. It is very easy to let your emotions cloud your judgement whenever you think of the money you have at stake. So here’s a piece of advice I think might help you, think of whatever you are risking as pips not money. This can help remove emotion clouding your judgement that is preventing you from thinking rationally. The primary cause of emotion you experience while trading is fear. Once you are able to overcome it and realize that you don’t have to know what is going to happen next to win and also that every moment in the market is unique, nothing can stop you from consistently pulling out profits for the market. Those principles are the same principles the Casino houses operate on, and so they always win in the long run, thats where you get the saying”the house always wins" from.
Be the Casino and not the gambler.
so I guess we have gotten to the end of my post. I seriously hope you have learnt something new today, Thank you for reading.
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