How is your Forex journey going? Are you making a profit?
If you are failing as a trader, I know why, and I can help you. I've been trading for almost 15 years. I've gone from blowing trading accounts to making a consistent return. I've been there and done it, from trading failure to trading success.
Read on to learn why you are failing and what you need to achieve trading success.
Forex: What you are doing wrong
There are two reasons why you fail:
You lack an edge, i.e. you don't have a profitable trading strategy
You lack emotional disciple
90% of you are not yet successful because of one of these. Maybe both.
To become profitable in Forex, you must have an edge. This is created by having a set of rules (a trading strategy or plan), which puts chance in your favour. Without an edge, you are left to 'trade what you see', or worse, 'trade what you feel'. Some Forex educators may promote trading what you see, but it will lead to failure. Believe me.
For people who do have a profitable trading strategy, you are likely not following it due to your emotions. The challenges of trading psychology get in the way. Fear, greed, and impatience lead you to divert from the safety of your trading rules to trading failure.
Forex: What you need to change
Learn, Create, or Change a Successful Trading Strategy
Your first step is to have a profitable trading strategy. Perhaps you've tried strategies, but they aren't working. The main reasons why your trading strategy is not profitable are:
You need to gain technical skills. This will only be apply to some of you as the first thing most new traders do is learn technical analysis, and the thing most traders do when they are failing is to learn more technical analysis. Most traders know technical analysis well. However, if you need help reading and interpreting price charts, take my Free Technical Analysis Course.
You need to gain fundamental skills. This will be apply to most of you. Failing traders hate fundamental analysis. They are critical of it even though they are failing. Never take financial advice from someone poor. In turn, don't ignore fundamental analysis if you are not profitable. Fundamental analysis is a significant way to turn trading losses into profits. I've made it easy for you to learn by providing a Free Fundamental Analysis Course.
You don't use multiple time-frame analysis. There is no such thing as successfully trading a single time frame. I've been trading for 15 years. It's nearly impossible. Increase your chances by analysing multiple time frames. For me, this is the monthly, weekly, daily, 4-hourly, and 1-hourly charts.
Your strategy needs to be more complex. We all love the KISS acronym, 'Keep it simple, stupid'. However, your strategy will not have an edge if it is too simple. It must be simple enough to follow but detailed enough to provide a clear trading edge.
You haven't backtested your strategy. Once you have a trading system that provides an edge, you need to back test it or at least forward-test it with a small live or demo account. Do not trade a strategy until you know it's historic win-rate and performance.
You need to make the time to develop a strategy. Perhaps you do the skills and know-how; you just haven't made the time yet. If this is you, make the time and start your trading journey!
Overcome Your Trading Emotions
Beating the challenges of trading psychology and overcoming your trading emotions are key to successful trading. Most fail because of their negative emotions. They become fearful, so they close trades early or don't take trades when they should. They become impatient and force trades rather than patiently waiting for their trading system to signal a trade.
Most negative trading emotions are rooted in false expectations. Nearly all new traders have unrealistic beliefs about Forex. They believe trading FX is 'get rich quick'. They believe risking more means higher returns. False expectations lead to heightened negative emotions.
The best ways to reduce your trading emotions are:
Change your expectations. Have a more realistic view of Forex trading and your expected returns.
Think longer-term. Focus on making an annual profit, not daily or weekly.
Reduce your position sizing. Risking less per trade significantly reduces negative trading emotions.
Learn from a professional. Consider learning from someone who has learned to control their trading emotions. I offer a Forex Mentor Program here.
You can learn more about beating trading psychology and overcoming trading emotions in my Ultimate Guide to Beating Trading Emotions.
Forex: What Else
There are other reasons why you may be failing as a trader. These include:
Your broker is at fault. Perhaps your broker is not trustworthy or is providing a poor service. Trading with a well-regulated Forex broker is the best way to have a safe and reliable trading experience. I have a list of well-regulated and trustworthy Forex brokers.
You need to implement more robust risk and money management. To learn this, I have an Ultimate Guide to Risk and Money Management.
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