CAN YOU REALLY MAKE MONEY IN FOREX?
This is the question of thousands if not millions of people all over the world. Which person in his right mind, wouldn't like to earn money trading forex from home using just his laptop and an internet connection?
But you see, making money trading forex, stocks, options, etc., is a very complex subject, some experts will tell you that it is impossible to make a living trading forex because of the high risk involved, while others will say that indeed, it is possible.
Which people should you believe?
Let me ask you another question. "IS IT POSSIBLE TO MAKE MONEY OPERATING A RESTAURANT BUSINESS?" Some people will say sure it is possible, all you have to do is to find the right location, have a good service, offer good quality food, good advertising and marketing plan, good pricing, etc.
Other people will say that it is impossible to make money in restaurant business, as there are so many brand names already, and opening and operating a restaurant business today is quite risky. Which people should you believe?
You know what?
Everybody is right! You can make money opening a restaurant business, but at the same time you may lose a lot of money. It all depends in one single factor, your fundamentals. Do you really know what you are doing? Do you have the experience, skills, desire, patient to succeed, or just you have some spare money and you don't really know what to do with it?
Many people who are just starting out forex trading have some false believes that it is easy to earn a living from it.
IT IS NOT EASY! Write it in your big black notebook with big letters.
IT IS NOT EASY TO MAKE MONEY TRADING FOREX.
Write it again and again better with red ink, until this idea enters the deepest vault of your brain.
If it is not easy to earn money trading forex, why do so many thousands of people get involved?
At a first glance, making money in forex seems easy. You just sit on your bed, or even lying down, and you open a buy or a sell order of your favourite currency pair. Then you wait to close the order with a profit. This is the idea, a false idea.
First of all, if it was that easy, the brokers wouldn't try to get new clients all the time, but they would just trade forex themselves. If forex brokers had found already the chicken that laid the golden eggs, in the name of forex trading, why should they want to share the golden eggs with you?
Simply put, forex brokers do not really have a clue on how someone can earn money trading forex, but the same applies also for the 95% of the wannabe forex traders that give them their cash every month!
The cycle is repeating itself every month " forex brokers get their cash from the losers, and wannabe forex traders give up on their dream of forex profits, after they lose some thousands soon or later. "
In this point I would like to ask you something, "Who are taking the money away from the forex losers?" Brokers just take a spread commission from each trade. Banks and hedge funds which control forex market? Show me someone that can control alone a 5 trillion per day market, and I will be so blessed to know who that firm is!
It is the same like you tell me there is an entity that can control the weather, the natural disasters, and all the things that happen in the universe. Surely, they try to, but IT IS IMPOSSIBLE! Even a dictator can't really control everything that happens in his country. He will try though, but there are also high officials from the state, from the army, police, etc, that have also their own power and control. NO MAN IS GOD!
Take out from your mind the idea that there is a golden elite group that can do whatever they want with forex prices. Surely, they try, but they are not alone! Forex traders are trying to predict prices, and the better they are at this, the more success they can enjoy. Sometimes they win, sometimes they lose. It is impossible to be a forex trader, and win always. Forget about it. Be realistic. The idea is to earn more than you lose. If you lose $2,000 per month, but you win more than this amount, in the end of the month, you are earning money out of forex market! This is how it works!
Here is the catch! People have learned since childhood that if you lose money, means you have failed, and you are not good in the business operation that you are doing. Better stop this kind of business and find something else to earn money. But, this idea does not apply in forex market, and in financial markets in general! It is inevitable that sometimes you will lose, but you have to cut your losses small. When you are in a winning trade, you have to let your profits run! Simple but not many people seem to understand or follow this golden rule!
Nobody can predict forex movements for the next months, let alone for the next weeks, or days. This is why forex day traders are trying to predict market movements at specific hours of the trading day, so they can gain 20 - 50 pips, and this is how they earn their income. Yes it is possible to win in the long run but only if you are not greedy!
Learning to control your emotions is the greatest task in forex trading.
Have in mind that a forex trader has two kinds of capital in his possession. The capital that he has in his account and it can be $100 dollars or even $10,000. This money capital in fact is not the most important capital! The most important capital is his mental capital!
You can have a million bucks in your trading account, but if you lack of enough mental capital, soon or later you will lose your one million bucks from traders that their mental capital is higher than yours! Whenever your mental capital advices, your cash capital follows.
Your mental capital is your ability to control your emotions, to cut your losses quickly when necessary, to let your profit run and to have just the confidence that you will beat the other traders, as when a trader earns money from a trade, in fact he takes the money out from the traders that have not made the right prediction. This in return shows a lesson to the losers, and rewards in cash the winner. In case the winner gets greedy though, and loses his discipline, then in fact he loses his mental capital, and soon or later he will lose his cash capital.
For the market it does not matter if you win or lose. It matters only to you! The markets are made from thousands of traders that put together billions of dollars on each trade and bet the next movement. Most of traders will lose; only some of the traders will win. It was always like this, and it will always be like this. That means that you can also be a good trader! If other traders seem to make thousands each year out of the market, why then not you? Have in mind that they make more thousands by losing less thousands.
Nobody can win every time. This is the nature of the markets. If you can't take controlled risks, if you want a profit without any chance that you may lose, then simply forex market is not for you!