Are you a contender? Have you got what it takes to hack it
in the fast moving, sometimes ultra high glorious, other
times ocean trench depression low world of Forex Trading?
This may sound like a standard motivational talk, but
having the right frame of mind DOES influence your trading
results - So before you risk your well earned money read
this and ask yourself - Have I got the edge? - Or should I
stay with regular shares?
There are many aspects of Forex trading that are outside
the investor's control.
Forex market participants number in the millions - traders
for the world's largest banks, huge governments and
individuals just like you. Unlike stocks, even the big
traders have a tiny effect on exchange rates.
Even when setting interest rates and other actions that
influence inflation, the largest governments can have no
immediate impact on exchanges. The Forex markets are simply
too large - $2 trillion daily - for any one player to
dominate the action.
Trading strategies, which are essential, can increase the
odds of making profits and help minimize or avoid losses.
They give the knowledgeable trader that tiny edge that can
make the difference between winning and losing on a given
trade, or over time.
But before looking at market influences, and even before
developing a set of technical strategies that help guide
trading choices, the novice Forex investor has to honestly
and objectively examine his or her own attitudes.
Forex is fast-paced, complicated and requires a
well-thought out game plan. That game plan has to be
executed with nerve and skill. Trading successfully in a
demo account for several weeks is essential but can lead to
unwarranted confidence. Traders who invest Monopoly money
will often take chances, leading to successful trades, that
they wouldn't dream of taking with real money.
Real trading requires answering honestly a number of
questions that can be difficult to answer objectively when
the subject is the self-same trader asking them. What are
your financial trading goals? Looking for a quick buck?
Seek elsewhere. You will have losses that wipe them out.
Looking for secure, low-risk capital accumulation? Try AAA
bonds instead.
Forex trading can be simultaneously a stimulating
intellectual game and an exciting adventure. The thrill of
victory! The despair of (temporary) defeat! The mastery of
the intricacies of Fibonacci, Parabolic SAR, Stochastic
Oscillators and Doji Stars. All this, and much more, is
part of Forex investing.
As a result, you will need to be very frank with yourself
and decide how (and whether) you are prepared to deal with
pressure and fear. Even professional traders do not have
any certain system of ensuring profits and avoiding losses.
The pressure of deciding when to buy and when to sell is
many times larger than in stock trading. The fear of loss
is greater, in part because of the amplification provided
by 100:1 or larger leverage.
Even winning can be problematic. With practice and
persistence, provided you don't quit too soon or run out of
money too quickly, you will have periods when it all seems
laughingly easy. That can lead to euphoria, which is great.
But it can also lead to cockiness, which is fatal. Nothing
will wipe out a trader quicker than arrogance. Confidence
is essential, vanity is suicidal.
The other side of the coin to be avoided is too much second
guessing. Successful trading requires bold moves based on
sound judgment and confidence. Every decision is a small
leap of faith, since no one can know in advance for certain
what the outcome will be. Probability of one degree or
another is the best that can be achieved.
All this will be accompanied by the fear of loss of
capital, which often leads to panic selling in the face of
what would have been a temporary price movement. It is of
such panics that depressions are made, both economic and
psychological.
Forex is a roller coaster ride. But if you have a good
inner ear and a strong stomach, bolstered by the brain of a
statistician and the nerves of a pro billiards player, you
will be well suited to end the ride with full pockets.
----------------------------------------------------
From London, Nick now lives in Stockholm with wife Lena and
Gunnar a Border Terrier. He likes long forest and lakes
walks, is learning Swedish and loves making money from
investments that are as cunning as a fox and go up even
when the markets go down! He runs
http://www.forex-master-trader.info which promotes a system
called Forex Trend Trader and offers a free Forex for
Beginners email course.
No comments:
Post a Comment