95% of traders lose money and that's a fact and it's also a fact that most of the so called conventional ideas about making money are dead wrong and cause traders to lose. Let's look at some conventional wisdom and why it's dead wrong...
1. Buy Low sell High is a Good Way to Trade
Not in forex trading it isn't - the best way to trade and catch the big moves is to buy breakouts to new market highs or lows. It's a fact that most major trends start from these.
Also if you try and buy bottoms and sell tops you are making the next mistake.
2. Predicting Forex Prices Works
No it doesn't. If you predict you're hoping or guessing and that won't get you far in life or forex trading.
Traders are obsessed with predicting exact tops and bottoms but its not possible so don't try and that leads to my next point...
3. The Markets Move to Science
This idea is loved by many traders but there is no science to market movement.
Why?
Because if they did, we would all know the price in advance and there would be no market.
Traders follow such "legends" as Gann Elliot and Fibonacci and think they know the code and lose. Markets are an odds game, nothing more than that so stop trying to be perfect and make some money.
4. Day Trading and Scalping Reduces Risk
Know it doesn't, it creates it and guarantees you will lose, as all short term moves are random in daily time frames - pretty obvious really - but many novice traders fall for this one.
5. Get a Forex Robot
Most of these are junk and have back tested simulations as track records and the market gives them a lesson in manners in the real world.
Don't fall for the hype check the track record which is normally a made up simulation.
6. Follow an expert
Traders never learn - the so called experts are in most cases not really experts at all - but even those that offer good advice the trader can't follow, because he cant go through a period of losses, without throwing the towel in because its not his track record and confidence and discipline crumbles.
7. Forex Trading is Easy
Most traders just think it's easy and of course its not - that's why 95% of traders fail. Sure the rewards are high - but it requires effort to make them.
8. Risk 2% Per Trade
This is just plain dumb.
If you don't risk much you wont make much and most traders in retail forex are trading small amounts so on $1,000 2% is $20.00, that wont make you much!
9. Diversify
Spread your risk is a commonly accepted wisdom but all it does is dilute profits and if you have a small account it's a total waste of time.
10. Technology can Help You Win
No it can't - think about it and remember 30 years ago 95% of traders lost and ratio is still the same today, despite all the advances in computers, software and communications.
So always remember forex should be simple and trying to be clever will just see you lose.
Forex trading offers an opportunity for the trader who accepts that he has to do it on his own and create his own rules and follow them with discipline. Anyone can learn forex and anyone can win and really its not the market that beats the trader, it's the trader who beats himself.
Forex trading is open to everyone and anyone can enjoy currency trading success, if they have a willingness to work hard and have the mindset to succeed.
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