The Difficulties of Becoming Successful in Forex

The difficulties of becoming successful in trading forex

Developing an exceptional skill is a process that will span over weeks, months, years and decades. Those who are looking for a quick solution will fail and those who accept that becoming superior to a large number of people would take a long time will succeed. Individuals from all interests and professions share the same thing in common. They are in a perpetual race to reach the unknown. They have studied the books. They have listened to seminars. They have consumed all information they could find in order to gain knowledge. All while not being sure whether it will help increase the rate of their success, or exactly how it would happen. They were truly the lone warriors, they were the patient warriors, and they were the silent warriors. But why the silence? With all of the material read, how is it that nothing was learned? Had something important been learned, you would have been a successful trader by now! Did the authors you read not know what to write about? Or more importantly, did they not know how to write, how to teach you what they know?

There are few problems with teaching how to be successful not only at trading forex, but at any other one thing. Had the masters of forex posted all of the details that they believe brought them to the throne of success things would have been much easier for those who are just starting to learn trading the currency market. And it seems, many of those "masters" did just that, we see many books and online articles, blogs, tutorials and what else have we not yet seen?

As if on top of all else that was already working against us, and discouraging us from being more confident, reading the words in a book does not make us know that much more because we can never understand the meaning of that which we have no experience with, no matter how many times we read a book. Reading a book by itself does not make us ready to be successful. Experience is a necessary ingredient of success.

This will become obvious if you are a beginner and you have just read a book such as Forex: Patterns & Probabilities by Ed Ponsi. After the first run through the book, a few insights are gained. Yet, questions such as why is Ed risking between 30 to 70 pips in his trading demonstrations sound threatening to people who come to the book with little experience. Especially when it comes to higher amounts of pips on the line.

As in an example, let us assume we are trading a pair such as EUR/USD. 70 pips in a standard account, whether we are entering a long or short position in the amount of 1 lot, equals approximately $700. We know that one of the most important rules is we do not expose more than 2% of our trading account to risk under any circumstances in any trade that we make. But $700 is 2% of $35,000. This means that Ed's examples assume that you have at least $35,000 in your trading account in order for the strategies that he explains to make any sense. And Ed is probably right, too.

We can benefit from reducing the amount of percent we risk, but by doing so we also marginally increase the odds of our trade resulting in a loss because forex is an extremely volatile market. Volatility can destroy an excellent entry. One of the greatest mistakes one can make is to change ones mind about the direction of the market once his or her trade is taken out by a volatile move. People sometimes confuse an outbreak for the change in market's direction. This results in confusion and guesswork. We want to avoid this type of situation as much as we can, but if we find ourselves in a situation that makes us feel uncertain about the outcome of a trade, we must exist such trade immediately and take a small loss.

Final words

While other masters of forex write books and post information to the Internet, the precursor of many people's success is persistent work. This work must include the trading experience. A person starting learning about forex trading must accept the fact that he or she will likely lose the entire trading account while gaining that experience. This is often the first wake-up call to start learning about Risk Management and why it is important.