You have probably heard this that about 90% of all traders lose their capital. That’s true. Well you know why? Because there are too many trader-wanna-bes who just can’t take the time to learn the trade (pun intended). Many traders place orders without having clear insights on what they are doing. Hopefully you’re not one of them, or at least you’ll transform from that kind of trader to a smarter forex trader.
Immature traders can’t control their emotions. Staying neutral in this business is crucial to succeeding as a forex trader. For professional traders there’s nothing like “excited” or “down”. You have to have the balls to take the punches when you lose. After all, it doesn’t make sense if you start trading some capital that you can’t afford to lose. Well it’s bad to lose but you have to be able to stay cool and make informed decisions when trading. The same applies when you make some pips. Mature traders don’t go running around and screaming over profits made.
Unwarranted arrogance is not uncommon to new traders. Making a streak of wins (often with luck) doesn’t mean a trader has become elite. I don’t see myself bragging about the fact that I made 10 wins in a row, and I don’t expect the same of you. It’s all for the good of the game and staying humble, and trying to understand why a streak of wins happened and then finding ways to improve that winning strategy.
Forex greenhorns mostly are in the foreign exchange market for the wrong reason: To get rich (quick). I’m not surprised. Forex trading is like any other profession out there (at least for those who treat is as one, than as a hobby or gambling). If you’re part time in forex, that’s OK but if making quick gains is anyone’s motive, then that’s not going to work. People often come to me and say, “I hear you trade forex, you must be rich!”. I look at them and smile and then I tell them: “I’m not rich, I just get paid well enough when I do my work well”.
The word “discipline” is new to more forex newbies. New traders hardly develop a strategy to follow, and even if somehow, they are advised by someone to find a strategy, they almost always don’t follow it and get carried away when some fluke wins come in. We don’t want to be these kind of traders. Staying disciplined pays off very well when we’re wise enough to follow and actually stick to a plan no matter what.
There’s no way a pro forex trader will make unrealistic expectations about how much pips they are going to make. In fact very good traders make about 5-10% ROI per month and they keep this consistency throughout the year and this is what make a successful trader. But I’ve met some folks who project about 50% profit and and end up losing everything.
It’s essential to learn about this market everyday and I hope you don’t make these mistakes. If you do, then I think you should advise yourself and be a winner!
Do you think there are other factors in spotting newbies that I failed to mention? Please share them in the comments.