How To Be A Successful Forex Trader
Many have tried, many have failed. Forex is the Floyd “Money” Mayweather of financial trading. It suckers in neophyte traders with promises of riches and then quickly gives them a beating. Although, the biggest competitors in Forex are the major banks, it is ourselves and our need for instant gratification and action that truly destroys us.
Almost all wannabe Forex traders are day traders. They love the video game nature of making trades and earning money at lighten speed. What they foolishly do not understand is that the banks and their quants who are running mathematical models to pick trades have the only advantage when it comes to intraday trading. The newbies are just the fish who eaten by a larger animal.
Thank you for playing! Like most losers at Forex, new traders use a discretionary style of trading. They are trading based on gut instincts and fear, while the smart money uses objective analysis and models to make trades. Often times they use computers that automatically open trades as to remove any human subjectivity, fear and greed from their trades.
Simply said, Forex is almost an impossible to beat game when you day trade. The biggest winners both professionally and as hobbyist are traders who make trades on a larger time frame. These are traders who hold their positions for 1 to 365 days are more. Forex has a tendency to trend more often than any other financial market and these trends can last for years.
While the new traders waste time and freely give away their money playing the day trading game, the smart money is racking up pips over the long term. Who do you want to be, a short term player with a low expectation of winning or a long term player?
Personally, I didn’t become a winning trader until I started trading long term. I never use a chart that is smaller than the daily bar chart, this allows me to avoid all the noise that happens when the banks go to war on smaller time frames. I try to avoid the banks intraday battles and instead I ride the big trend waves that have less risk.
As a losing day trader, I was in front of the computer all day, but as a long term trader I check the market not more than 3 times per day.
As you can see, day trading Forex is a losing proposition. The average trader doesn’t have the experience, discipline, tools or information to battle with the large institutional banks who make the Forex market. New traders will find greater success trading long term.
Forex is a long term market where currency pairs can trend for years. Why bypass all those pips for a little bit of day trading excitement that isn’t profitable. The instant gratification and gambling nature of new traders is what most kills them. They are more interested in making trades than making a profit. Do what I say and you will earn more money in Forex.