• Home

It would be difficult for me to start this blog on a negative note, by saying that trading is not for everyone. But the unfortunate reality is that it is true. Not everyone will succeed at trading the forex market. It is not difficult to understand that many people fail at trading forex, or that they find it difficult to do. Most people who do fail trading leave the market quick, often saying that trading is simply another word for gambling, or luck.

The material on this website assumes absolutely no previous knowledge of the market. This is a friendly community website. It is not bound by marketing or advertising - my other websites generate enough income to cover this website hosting costs. My sole goal is to have visitors of this website produce good trading results. All reading material on this website is free to everyone.

Over a period of time, I've observed many forex traders. I have noticed one trait that all successful trades have, without a single exception. They are serious. There are a few groups of people this forex blog is not for. People who don't want to be taught. People who don't take forex trading seriously. People who are looking for a quick solution or a "get rich quick" scheme. How many times do I see an individual whose behavior portrays a person who cannot be taught. Arrogance and immaturity are far from ideal traits of a successful trader. If you believe you are not a very serious person in general, your behavior is unpredictable, you may consider the information on this website as a chance to make that change. Although personal development is beyond the scope of the subjects covered on this website, being organized and disciplined produces effective results not only in forex trading but in interpersonal matters as well. Otherwise you may end up saying that forex is gambling, luck, and that it is impossible to make money with it. Forex trading demands maturity, seriousness, discipline and solid money management skills.

What is it like to trade forex?

I noticed that there is little talk about success even among some of the popular forex communities (message boards and IRC rooms) on the Internet. Talks of success are usually replaced by complete silence, market assumptions, personal opinions and "what the market is going to do" predictions. It is not uncommon to see someone boast about their +200 daily pip daily profit in a chat room. But when privately asked about how many pips that individual lost for that same day, their answer is usually over 75% of the profit amount. I see this scenario again and again. When this happens, we lie to others, and of course we lie to ourselves. There is no success to be found in the forex market if we think like this. Ed Ponsi, a popular educator and writer on the subject (whose book Forex: Patterns and Probabilities) is enjoyed by many traders who like to read. In his brilliant book he mentions that this type of behavior might work in solving interpersonal relationships with your spouse, or at work with your boss. But there is no room for such behavior in forex. I have never felt more on the same page with another forex author.

But changing this type of psychology is not always easy, and there are no simple manuals that will accomplish the task of making someone true to themselves and others. I believe that we become more honest with ourselves as we get older. As we become mature.

The example of the happy trader above also tells us that not everyone thinks about money management, a required element of every serious trader's trading approach. And a must-have of every seriously profitable trader. Keeping a trade diary and making notes is an important part of learning about and trading the forex market. Understanding that you will have more success thinking about the market as a machine that abides by the rules of probabilities, instead of being deterministic (single choice does not affect the market moves) is an important shift in psychology for those who are not very familiar with mathematics. In other words, many profitable traders look at their trading experience as a whole in terms of probabilities and percentages, rather than making the best trading decisions, using the best indicator settings or using the best strategy as a means to success.

What may differentiate a profitable trader from a beginner is that the profitable trader will expose his or her profits in percent. It is uncommon for serious, profitable traders to boast about how many pips they have made. For example this year's growth is 3000% of the starting amount at the beginning of the year. There are important reasons to this.

It is also hard to believe that at the fundamental level the psychology of people who are not making money is different from one another. Many traders see forex as something to try out and just see "if it works". Many of them compare forex to gambling in a casino. The first trade that gained a large profit will increase a beginner's confidence so much that they will soon be placing trades left and right, eventually losing the entire account. But the consistent long-term success of a professional trader will secure the sense of confidence for the rest of his or her life. Therefore this mindset of the professional trader is far from thinking that they gamble their money, because they have proven to themselves that trading forex can be profitable. This knowledge has fundamentally changed their own psychology, and increased the level of confidence required in order to continue trading. The goal of this website is to help people who are interested in trading for a living to secure that level of knowledge and therefore build confidence in the idea that trading forex can be profitable. This change can only occur within the minds of people who had "seen it for themselves". But before that can takes place, first we have to learn and understand the important elements of trading forex.

It would be harder to believe that in fact the people who fail to make profits by trading this market are doing the right thing. What are the people like who fall within the group of those who are profitable, what unites these individuals? This is the question that Forex Prognosis website will investigate. As someone who made research not only about technical analysis and fundamentals but also as a keen observer of traders' psychology, I make no doubt that whatever those individuals have, whatever conclusions they have made in order to eventually succeed, they have experienced it and their knowledge was built on that experience, giving them full confidence in trading the currency market.

Giving up is not an option, if you are dedicated to learning the ability to profit from this market. I say this because learning to trade forex is not an expensive endeavor, in fact, it can be absolutely free. One of the biggest mistakes the beginner makes is to acquire the standard trading account where 1 pip usually equals $10 and to fund it with an insufficient amount of cash. This at first seems like a wise decision and the trader says to himself - "I will fund my account with the minimum deposit amount, and ensure that my leverage settings allow me to have $10 per pip. This way I will be spending little money and taking full potential of the leverage." This is how many people set themselves up for eventually believing that Forex is a gamble! The minimum deposit to open a standard account at GFTForex and start trading with the company's charting software (called Dealbook360) is only $2,500. The minimum amount that one needs to have in order to have enough equity and continue trading is about $1,400. In other words, you can deposit $2,500 into your GFT account and trade until you only have $1,400 left. Anything less than that and you don't have enough equity to trade. You would then need to replenish that amount up to at least $1,400. This will allow you to make one more trade. And the cycle would continue. This is a disaster. A profitable trader will instantly see the problem with this. $1,400 is 56% of the entire deposit - more than half of your entire trading account balance has just been lost. The solution must not be to replenish the account, but to reconsider your trading activity rate, and the amount of money you have. The successful trader knows that he or she will never risk more than 2% of their entire account on any one trade. If that happens this smart trader will stop trading for another 2 weeks, or commonly a month. Above all, this trader would not start trading with a minimum deposit or large leverage.

Psychology and self-control are very important

This cannot be stressed enough. The psychology of trading and how well you are capable of controlling your emotions is going to define whether you will make money, or lose money.

The possibilities

Trading foreign currency is a relatively new trend in making money on the Internet. The interest in the forex market has been growing steadily and consistently over the past several years. Because some of the same principles apply, many foreign currency exchange traders come to forex from trading the stock market. Trading forex is a fascinating activity. This market can create opportunities to work from home as well as to reap the magnificent rewards by trading using live charts. Needless to say, successful traders make money consistently and are free from reporting to the boss. They create their own rules for how they choose to live their lives. They are generous providers for the household. These people don't come from fairy tales, they exist just like you and I. And if you are reading this between Monday morning and Friday evening, chances are these people are making large profits right now.