The Biggest Secret to Successful Currency TradingSo, let’s look at the conventional wisdom most traders follow, and why it actually causes them to fail - and how if you ignore the conventional wisdom, you can actually make big profits!
1. It’s Easy to Make Money!
Most currency traders are led to believe, that successful currency trading is easy - and there are plenty of vendors and brokers, who perpetrate this myth - as they make money from this myth.
As we all know in life making money in any area is not easy.
If you think successful currency trading is easy, you’re in for a reality check – successful trading isn’t easy.
2. Responsibility
This leads on from the above - if you want to make big profits, then you are responsible, and no one else.
The fact is, the majority of people in life can’t accept responsibility – and this means they will fail. They think someone else can give them success - and of course, they can’t. Many people rely on guru’s – who, if they could make money themselves, wouldn’t be selling their advice.
3. Methods Doomed to Failure
There are plenty of methods out there that are doomed to failure.
Let’s take day trading - as the biggest doomed method of all! How can you make profits in day, which are big enough to cover the losses on your losing days, cover large commission and slippage costs? You can’t - but brokers will tell you that you can, as they are making more commission!
There are many more examples - but this is the perfect example of how not to be successful in currency trading.
4. Money Management
We all know that money management is one of the keys to successful currency trading - but on small accounts, conventional wisdom states the risking of about 2% per trade! Well your risk on a 10,000 account is just $200. So what happens? - You take small risks and get stopped out most of the time - and never make any money.
If you aren’t going to take a risk - don’t trade currencies.
5. Market Timing is the Key to Success
No, it isn’t - this involves predicting the market. Many traders like to follow predictive theories such as Gann and Elliot Wave - that try to predict where you should enter the market in advance. These predictive theories don’t work.
You simply need to follow market action - and wait for confirmation. You may miss part of the trade, but your odds of making money are far higher.
The Big Secret
We can’t cover all the aspects of successful currency trading in a single article.
However, 90% of traders follow conventional wisdom - and 90% of traders lose money - which tells you, the biggest secret of currency trading success is not to follow conventional wisdom.