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The Biggest Secret to Successful Currency Trading
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Article
The Biggest Secret to Successful Currency
Trading
Successful currency trading looks deceptively simple, yet
few traders succeed - despite the fact that there is plenty
of material around to show them how. So why is this? - The fact
is, much of the conventional wisdom given about successful currency
trading, actually leads to the opposite - it actually causes
traders to fail.
So, let’s look at the conventional wisdom most traders follow,
and why it actually causes them to fail - and how if you ignore
the conventional wisdom, you can actually make big profits!
1. It’s Easy to Make Money!
Most currency traders are led to believe, that successful
currency trading is easy - and there are plenty of vendors and
brokers, who perpetrate this myth - as they make money from
this myth.
As we all know in life making money in any area is not easy.
If you think successful currency trading is easy, you’re
in for a reality check – successful trading isn’t easy.
2. Responsibility
This leads on from the above - if you want to make big profits,
then you are responsible, and no one else.
The fact is, the majority of people in life can’t accept
responsibility – and this means they will fail. They think someone
else can give them success - and of course, they can’t. Many
people rely on guru’s – who, if they could make money themselves,
wouldn’t be selling their advice.
3. Methods Doomed to Failure
There are plenty of methods out there that are doomed to
failure.
Let’s take day trading - as the biggest doomed method of
all! How can you make profits in day, which are big enough to
cover the losses on your losing days, cover large commission
and slippage costs? You can’t - but brokers will tell you that
you can, as they are making more commission!
There are many more examples - but this is the perfect example
of how not to be successful in currency trading.
4. Money Management
We all know that money management is one of the keys to
successful currency trading - but on small accounts, conventional
wisdom states the risking of about 2% per trade! Well your risk
on a 10,000 account is just $200. So what happens? - You take
small risks and get stopped out most of the time - and never
make any money.
If you aren’t going to take a risk - don’t trade currencies.
5. Market Timing is the Key to Success
No, it isn’t - this involves predicting the market. Many
traders like to follow predictive theories such as Gann and
Elliot Wave - that try to predict where you should enter the
market in advance. These predictive theories don’t work.
You simply need to follow market action - and wait for confirmation.
You may miss part of the trade, but your odds of making money
are far higher.
Some Positive Advice
Successful currency trading depends on the following character
traits:
1. Individual Responsibility – You and you alone
are responsible - and you can’t follow, or blame anyone else.
People generally like to think other people can give them
success, but life is simply not like that - it’s all down to
you.
2. Confidence – To acquire this trait you need
to do your own research, and come up with a trading method you
are happy to follow.
3. Discipline – This follows on from confidence
- if you have confidence, you can apply your method with the
rigid discipline necessary, and achieve currency-trading success.
4. Method – Your method needs to be long term
based and not predictive - simply follow market confirmations.
5. Risk – You need the courage to take calculated
risks. If you have a small account forget 2% - 10% to 20% is
a more realistic figure - which means you have to trade sparingly
- and have the courage to hit the big trades hard.
The Big Secret
We can’t cover all the aspects of successful currency trading
in a single article.
However, 90% of traders follow conventional wisdom - and
90% of traders lose money - which tells you, the biggest secret
of currency trading success is not to follow conventional wisdom.
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