In the business world, every niche has a pretty public face and then a not-so-pretty (sometimes ugly) face that is swept below the carpet; far from the prying eyes of the masses and competitors and investors. Well, it should not come as a surprise to you if I say that something similar keeps happening all the time in the Forex trading world as well.
No matter how cock-sure you may be feeling right now about knowing everything that is to know about trading Forex, there still are some hidden facts that were purposefully buried deep down below the surface to fool newbies and fresh entrants into the world of currency trading.
If you are wondering why I am revealing these dirty secrets, then let me tell you that I have no selfish intentions like those who were hiding these facts from you. This simply for the reason that I am not here to sell anything to you. I have no Forex trading systems to sell to you, nor am I a Forex trading broker and no – I am not even trying to get you to trade on my Forex trading platform.
1. Forex Trading Is Not Rocket Science
Yeah, I know that comes across as a rude shock to most newbie aspirants to Forex trading, because every other trader is trying desperately to complicate stuff. Do not let those dangerous-looking graphs, minutely designed charts and the multi-colored indicators force you into having a cardiac stroke.
No matter what others are trying to say, Forex trading is definitely not rocket science, but it is not a LOTTERY or gambling game either!
A successful Forex trader does not need any complicated college degree or an expensive training program or any kind of miraculous skill. You do not even need to be an ace at mathematics or be a financial genius to be a Forex trader.
In reality, being a successful trader is really more of a psychology-based skill than a technical or numbers-based skill like many people think.
What you really need and what really matters is emotional discipline and consistent patience.
2. Risk Reward Ratio is More Important
But in fact, the truth of the matter is that overall risk reward ratio is far more important than percent returns.
What benefit is a percent return statement if all you could manage is a mere doubling of a meager amount of money in your trading account? I personally feel that it says nothing about your overall performance or success or even proficiency as a Forex trader.
A professional trader usually has a solid plan/strategy and is adept at applying it each time with precision and has not only reaped benefits out of it but also must have withdrawn the profit margins countless times during the year.
So if you study such an account the opening and closing balance may not display stellar percent returns. But, here the most important fact is that you are not actually looking at the right variables. He must have actually reaped numerous times more profits than a greenhorn who boasts about 100 percent returns. If you just prod him for more details, you will see that he probably made just about a few hundred dollars in profit, when compared to the pro, who must have reaped quite a few thousands.
3. Forex Trading Will Test Your Patience
Not everyone involved in this Forex trading wants you to know that Forex trading is actually a huge test of patience. Maybe that is because they are all busy trying to sell you quick fixes, master keys and shortcuts to Forex trading success. They want you to believe that if you buy their stuff, you will be rich overnight and you will be able to earn millions of dollars in the business of trading money.
Forex trading is not gambling and nor is it a 9-5 job that will pay you each month like clockwork. Instead it is just a matter of getting the best out of the current markets and disciplining yourself to hang in there until the factors are favorable.
If you want to see a whirlwind success or a windfall, then you must pack your Forex trading bags and go to Las Vegas and try your hand at the casinos there.
If Forex trading is what you are looking towards earning money, then you must invest in learning the right techniques, knowing the right strategy, spend loads of time and have truck-loads of patience.
4. Desperation Will Only Backfire
To be honest, the more desperate you are to make money via Forex trading, the more difficult it actually turns out to be. You know you desperately want to quit your dreary job, and that thought finally overtakes your power or capability to even think logically.
When you sit down to trade, all you can think of is your boss’s boring face, when in reality you are dabbling in Forex trading only to avoid seeing him day in and day out. That is why I say desperation backfires.
Your frequent emotional roller coaster rides can turn out to be hara-kiri for your Forex trading career. Finding the right price action trading strategy is not easy and not going to be presented to you on-demand. You will need to patiently wait for it to pop up and that will require you to shed all of your desperation and emotions. That in turn could take weeks or months.
Simply entering a trade, because you cannot bear to look at your boss’s face on a daily basis is not the cleverest way to trade.
5. Forex Trading Could be More Boring than Your Current Boss
If you jumped into Forex trading after seeing commercials of Forex traders zooming around in sports cars and wearing tuxedos and partying on exotic beaches, then you probably are in for a huge shock.
Patience is a virtue and you know virtue is always boring. It lacks the adrenaline rush that goes with sinning (if you know what I mean). Forex trading will definitely seem boring and there are times when you would find even more activity at 3 a.m. in a sleepy old age home, when compared to your Forex trading room when you are lying in wait for the right variables and market conditions to offer you a great set-up to enter you trade for the day.
I am not saying that making money in Forex trading is a boring process, but professional Forex traders are the ones who have mastered the art of keeping their emotions away from their money and trades.
Their heart neither skips a beat with joy over a win nor do they end up having a stroke over a loss. They have disciplined themselves to work patiently, consistently and with precision like a surgeon who is operating in the operation theater. And they continue doing this each time they trade and thus can foresee much of the wins and losses, leaving no room for shocking surprises.
6. You Do Not Need Gimmicks
Once you get involved in the world of currency trading, you will be bombarded each new day with a new product that promises to generate cartloads of cash for you. Be it automated Forex trading systems or market platforms or software programs, your success in earning a profit from currency trading does not depend on any of these.
Lacking none of these factors contribute to why many traders lose money in Forex trading. You only need two free things like your brain and a free trading platform and few paid stuff like a laptop, an internet connection to get you going.
Learning the basics, mastering a technique, sticking consistently to disciplined trading and overcoming your emotional temptations are far more important than investing in those gimmicks that people want to sell you.