Over the years I have taught thousands of currency traders and the way I have used to see if they are likely to succeed is to ask them a simple question which is enclosed in this article – so lets take a look at the question and the wrong and right answers.
Before we look at the question, lets make clear that 95% of all Forex traders lose money and that’s a big percentage, so Forex trading is obviously not a walk in the park and while anyone can learn to trade and win, you need to know and have confidence in what your doing. OK here is the question:
What is your trading edge ( defined ) and why do you have confidence in it to lead you to success?
Simple question but most people either look bemused when asked or give these answers which are not a trading edge and will lead to losses.
I have a software program I bought and all I need to do is follow it and it will make money.
Comment – If you think you can make money with no effort and for paying a hundred dollars or so, your in for a reality check – these systems are so cheap, because they lose money and the only person who makes a regular income is the person selling the system and he’s only selling it, because he can’t make money trading!
I am clever and work hard so I am bound to make money.
Comment – hard work and being clever, do not lead to Forex success at all, you are only judged on profits and that’s it and to make these does not require huge effort or being clever.
I have a system which can predict Forex prices in advance.
No you don’t, because Forex prices cannot be predicted and if they could, we would all know the price in advance and there would be no market! Lots of traders follow the far out mystical nonsense which the devotees of Fibonacci. Gann and Elliot sell but while these systems claim to be scientific there not, otherwise they would win EVERY trade and they don’t.
The above are just a few wrong answers but a trading edge is all about not just having a system you think will win ( and it can be very simple) but also understanding it and having rock solid confidence in it, so you can follow it with discipline.
Forex trading is not about following others, its about taking charge of your destiny and having confidence in what your doing which gives you the discipline, to follow your system when you lose and keep your losses small in these periods. You need to keep your equity intact, until you hit a home run and start making profits again. It’s a fact that most traders simply can’t trade with discipline and that’s why most lose.
A trading edge, is a combination of method you have learned and believe in and having the confidence and discipline to follow it, through losing periods without letting your emotions.
So if you want to win and don’t know what your trading edge is – you don’t have one!
So continue you with your Forex education until you do and you can become a winner in the world’s most exciting investment – global Forex trading.