Can you still remember your first encounter with forex? Do you remember getting all excited and wondering how your life would have been different if you had known about it just a little earlier? Fast forward to this date, see how the reality is a different story entirely.If you’re not one of the top 5% of forex traders, chances are you’ve quit or you’ve been struggling with streams of losing trades without any hope to even get your account to breakeven. Trading the financial markets is advertised as one of the easiest ways a person can make money. Just register with your broker (who most likely sponsored the adverts), watch a few videos on their YouTube channel, know your triggers—such as which indicator is crossing which—and you’re good to go.
Well, that looks simple. And while these advertisements may look true and harmless on the surface, forex trading is not the simplest investment in the world. Countless number of people have fallen into the traps of forex brokers who are just out for your money. They spend millions of dollars in yearly adverts so they can get tons of people to open accounts with them. And before you know it, you begin to make money. Sadly, the story doesn’t end that way. The story typically ends in you ceaselessly trying to reach their customer service line, and eventually getting a response that says the fault is yours, fund your account again and get back on track. Many traders easily give up by this time. And the others who choose not to give up would then proceed to enroll in courses and buy tools from “experts” who only profit from the markets through the courses and the tools they sell. These traders do all they can to learn all the “tips” and “strategies” they were taught, religiously stick to the rules, and needless to say, they still end up in a mess. This time they’re the victims of their own efforts.
This is a terrible cycle, not only in forex trading, but in the financial markets as a whole. The financial market does not have a shortage of blind men describing what it is and how to succeed.
I can go on and on, talking about so many reasons why traders lose money. But instead of telling you the several channels responsible for why just a very little fraction (about 3%) of traders eventually turn out to be profitable, let me go ahead and show what to do to become successful as a forex trader—and what I wish I had known before starting out..
1. Treat Forex as a Serious Business
I really can’t say this enough. There are so many people out there who just see the adverts on YouTube or some other sites, click through, demo-trade for a week, and there they go—with their credit cards in their hands.
It is so shocking when you hear the hugely ridiculous amounts that many traders use in this gamble. Learning to trade the markets is not a walk in the park.
To become successful, you have to treat trading like a very serious business. If you need to play some serious game, try Grand Theft Auto or Need for Speed, not forex.
2. There Are No Shortcuts
Well, I just lied. There are so many shortcuts to making money in the forex market, however, there is no shortcut to staying profitable.
Consider your forex journey as the adventure of a 5-year-old who is trying to learn how to ride a bicycle. You wouldn’t expect the child to learn to ride perfectly without having a few difficult moment. Sometimes you need to get the child a helmet and a pair of extra wheels.
Traders who nurse the dream of a hitch-free ride to consistency in forex trading often learn the hard reality after blowing thousands of dollars.
The reason why you can’t just jump into the market without getting prepared is that forex trading has so many sides to it; the technical, fundamental, and the emotional side. And if you cannot take your time to masters these, you have no business with the markets in the first place.
The forex market presents a good opportunity for anyone who is ready to give all it takes to learn the multi-dimensional nature. Don’t just grab a few indicators, thinking you’ve found the holy grail that you’d bet your life savings on.
3. Be Prepared to Fail (Safe)
You can’t leave you 5-year-old to ride a bike for the first time without the extra wheels and crash helmets. Why would you make that mistake when it comes to your account? You have no business with a live account if you’ve not demo-traded your strategies for at least 60 days.
Be sure you’ve tested your strategies for different trading sessions, time frames, and news sessions on your demo. Don’t be in a hurry to fund your account.
The journey to consistency is a journey of discipline. You must be prepared to have a few losses and learning moments. How you can manage these situations would determine how well you will go in your trading career.
4. It’s Not About Your Strategies Alone; Your Discipline Matters a Lot
Even after you’ve mastered your strategy and you feel very safe and comfortable with your system, you should be careful with amount of money you’re committing to any particular trade.
Make sure the odds are in your favor. What’s the point of doubling your account in a week if you’re going to lose everything you’ve got the following week? If you’re committing 10% of your account or more to a single trade, you’re automatically setting yourself up for failure.
Don’t give any single trade the power to kill you. Slow and steady ALWAYS wins the race in forex trading.
The journey to consistency is not an easy one. It takes determination, doggedness and discipline to have a combination of a good trading strategy, winning mindset and a dynamic attitude to learning. We all learnt to walk by falling. So also, every successful trader has learnt to be consistent by failing. Don’t give up your courage and don’t give up your discipline. With those in place, you’re good to go.
Author: Dayo Oladipo is a forex trader and content marketing strategist. He’s passionate about sharing his ideas on how traders can journey their way to consistency. He can trade anything that moves, but he mostly trades two pairs; EUR/JPY and EUR/USD. Dayo can be reached at Make Me Rank.