Straight Forward Ways to Become a Successful Forex Trader is a simple guide to help you become one of the most successful Forex traders in the world. We tap into our years of experience, and cut through the noise and bring you just what you need to be a successful trader.
After today, you won’t have to worry and keep asking yourself where do people go wrong with forex trading, and why do over 95% of forex traders lose money, you won’t be asking about successful forex trading strategies or how to become a successful forex trader.
Knowing this truth would do you an awful lot of good
Forex Trading has created many successful multi-millionaires and billionaires in the world, at the same time, many are those spending jail time, whose life had been destroyed by Forex Trading. Thus the question, why or where do people go wrong with Forex trading, or why do 95% of traders lose money is a valid one that lingers on the mind of Forex traders or would-be Forex traders. This often leads to you asking what the straight forward ways to become successful Forex traders are.
To answer this requires an honest and holistic approach devoid of personal sentiments, by doing this, we would be able to provide you answers to the questions you seek and more importantly show you four (4) straight forward ways to become a successful forex trader. While many of the topics listed below seem ordinary, our difference in approach and our experience with the market is what may give you the clue you have been searching for and set you on the path of becoming a truly successful forex trader.
Many before you have wondered about how to become successful at forex trading, many are those who wondered where they went wrong and many are those who are in a terrible place mentally because of this market. Often this question comes from people who have some exposure trading the market, mostly with bitter experiences, leaving them to wonder if the industry is not a scam.
Indeed the Forex market is not a scam, and there are Straight Forward Ways to Become a Successful Forex Trader, if you haven’t found it, you would keep wondering and wasting precious time, while those who know this secret would be enjoying life and making money off the market.
While legends like George Soros (Arguably the greatest trader to ever live) credited for the collapse of the British pound in 1992 have made billions from the market, there are thousands if not millions who have attempted to become successful through Forex Trading and failed woefully.
The likes of Nick Leeson known wildly for his rogue trades that led to the collapse of barrings bank (The UK’s oldest merchant bank), Kwaku Adoboli, spending time in jail by virtue of his dealings with the market. In all these madness, there seems to be a method and today I will share with you these Four Straight Forward Ways to Become a Successful Forex Trader, after which you won’t have to worry anymore.
How could an industry create so many billionaires and promise so much potential yet many people fail miserably, with many becoming homeless, destitute and some even spending jail time for their losses in the market? Is there a secret formula? Is there a secret society to join in order to be a member of these high net worth individuals?
Based on decades of experience and moving a few thousands of dollars to hundreds of thousands and moving million dollars to guess what? zero,!!!! It is safe to say, we have had our fair share of failures and a few success too, and will provide you a holistic view of the scenario from a real Forex traders’ perspective to guide you to become one of the world’s successful forex traders.
Regardless of what the media, bloggers, etc. would want you to believe, successful traders also make huge losses as well. In fact, in 1998, the man we call a legend, the defacto successful trader, many call him even horrible names for betting against the British pound and winning a billion dollars from that trade, no one other than the legendary George Soros, made a two (2) billion dollars loss trading in Russian government bonds. Weeks after Donald Trump won the election, our legend again lost one (1) billion dollars.
The losses in trading do not end there, here are a few to help you
- JP Morgan Chase lost USD 9 billion in 2012 credit default swaps.
- Morgan Stanley lost USD 9 billion in 2008 credit default swaps.
- Societe General lost USD 7.22 billion in the European futures index.
and the list continues.
It is safe to say, no one can be in this industry without suffering some losses at certain points. Anyone who says otherwise is lying through his or her teeth.
Losses are not the reason people go wrong with forex trading, people get it wrong because they take losses they can’t afford to take, they risk their entire portfolio on a single trade or single series of trades in a short period, they build their portfolio based on hope. I hate to burst your bubble, but Hope is not a strategy, and praying for a trend to change in your favor doesn’t work.
Did you catch the first trick? Successful forex traders make losses, they just manage the losses well. Write that down somewhere.
Yes! I am a Christian but when it comes to the Forex market, God doesn't listen to me.-Dorla
It is easy to spot Forex traders, who spent two years building their portfolio and use two months to blow the entire account. If you are reading this, you probably know someone who has done the same. What is the difference? The Novice would blow his account and top it up, while the experience would manage the losing streaks until the winners balance him out.
It is why at Dorla, our favorite mantra is that which says “we live to fight another day” and our second favorite; “Hope for the best, in the meantime, brace for impact” our leaders know the risks we are taking and our partners, know we can not make money for them unless we take some risk. Indeed, as our co-founder once said, and “we would only get to our destination by taking the necessary risk”
Forex trading is a business of risk management, period!. You can do all your analysis, you can fine-tune your strategy all you want, if your psychology is poor, you would have terrible risk management. Terrible risk management equals failure. You would fail, regardless of experience. This is not debatable, we see successful traders crash out all the time, because they let their guard down. What does this means?
A successful Forex trader could make even 20% profits a day, while a professional trader might just want to take it slow and reach that 20% in over months or even years.
I promised not to beat around the bush, but I see many people do this mistake over and over again, so let me attempt to rephrase this highly important piece for you. “You would fail your trading career if you do not manage your risk” it would not matter how many times you search for Straight Forward Ways to Become a Successful Forex Trader, or reasons why people go wrong with forex trading or why 95% of traders lose money.
If you do not manage your risk well, your entire life would be risky. There is no point in quickly moving, a thousand dollars to a hundred thousand dollars, and losing it all the following week. Heaven knows, we have made some of these terrible mistakes in the past, and you will too, eventually, with time because you would not take my advice and avoid the losses as necessary.
The business of Forex Trading is very involving intellectually, and emotionally. Even for the best Forex traders, we often fall prey to our emotions or simple intellectual stubbornness. If you are still here, you must be really motivated to get the right information out of us. You are sick and tired of the stories about Forex successes and really want to figure things out yourself.
You are on the right path, admittedly not an easy one, but one with very high-profit margins if you learn well and master your strategy. That’s what the blogs want you to believe but they are not entirely correct, mastering Forex trading is the mastering of self. If you master every single strategy on earth and fail to master your emotions, habits, and lifestyle, you would still fail.
This is a simple fact often ignored but if you impulse buy on the streets, or in the mall or online, you sure would impulse buy in the Forex market without complete analysis and understanding of the market position and market trends. Yes, you would! and the market would validate you for a while(giving you a few wins here and there) and crush you hard! with no mercy at all. Believe me, this happens in more ways than you could ever imagine.
Enough of my rants, let me lay bare before you the ways, the methodology we use to manage millions of dollars for our clients across the world without fail, the Straight Forward Ways to Become a Successful Forex Trader, and avoid being the 95% of traders who lose money.
4 straight forward ways to become a successful forex trader
- Kill your Indiscipline
- Avoid Emotional Trading
- Professional Risk Management
- Get the Right Mentality
The factors mentioned above seem so easy to overcome but with time, you soon realize it is not an easy task and most of these things are attitudinal. Thus requiring a longer amount of time to change, and many don’t change at all because they lack the discipline to do so.
Kill your Indiscipline
Indiscipline in real life would translate to indiscipline in the Forex market. Show me a good trader and I will show you an arrogant, determined, overconfident individual, who still manages to control the excesses of all these negative characters.
You have to be a bit overconfident to even dare to make money from forex trading, unfortunately, it is this overconfidence that you begin with that if not checked would quickly lead to your economic demise. Thus the best amongst us, though extremely confident, know their place in the market and know when to limit themselves or apply themselves.
That’s what the market does, it humbles you! If you fail to be humble, yet determined, you fail to understand the ways of the market, and you may spend your life fighting the market when you should be making love to the market.
And like every love affair, once a while, you would disagree on direction, remember, as it is with marriages, the woman is always right unless you don’t want a peaceful home. Men who understand this phenomenon tend to live a much longer and happy life.
My point is, the market is always right, it doesn’t matter how good your analysis is, it doesn’t matter your experience. If the market says it is selling, it would, and if it is buying, it sure damn would and there is nothing you can do about that. Thus do not fight the forex market.
Failure to follow strategy is the number one symptom of indiscipline among Forex traders. Every strategy has an entry and two possible exit points ie. stop loss or take profits.
It is very common to see a forex trader expand their stop losses when the market is against them, ie. they are fighting the market, they do not want to accept they are wrong, they are unable to contain their arrogance and know they can’t always be right.
It is here you see Forex traders widening their stop loss because they believe (hope) that the market would surely go in their direction, thus they change short term trades into long term trades.
While this behavior may seem trivial to you, it is far dangerous than you think. Not only is the Forex trader locking up funds into a wrong trade but they also deny themselves the opportunity to take the next available trade. Worse off, they go about agonizing about the losses they are making, hoping and praying the market goes in their favor until they have a margin call and lose 50% of their trading capital.
Traders trade their personalities, I know this for a fact, having worked with many professional traders and training quite a few myself. While all personalities provide diversity for the universe, not all are good for a successful career in trading forex. The best traders out there are quick acting.
They see a problem, they move quickly to solve it. Those who see problems and pray them away often wake up with huge losses in this business. Remember, you are making love to a market, which doesn’t care about you. It is your job to act and act fast. You need to be confident in your abilities and strategies as a trader, yet humble enough to know that the best trading day could quickly become your worse day if you aren’t smart enough.
The best practice is to trade according to your plan and accept the consequences! Heaven knows me, and many others before you have made these mistakes in the past. Life is too short to make every mistake to figure things out yourself, take a clue from us, when the market goes against you, take the loss like a true gentleman (pun intended), cut your losses and live to fight another day!
What happens though if your plan is wrong is another thing to consider. As a Forex trader, chances are you might not have successfully backtested your strategy. There is a difference between a strategy having a bad time and a strategy not working entirely. No single strategy works 100% of the time, strategies work best under certain conditions. Unfortunately, for many new forex traders, their strategies just suck.
No matter how much time you put into a strategy that sucks, you would never become a successful trader. Yes, get a mentor who is actively trading the market and learn from them (Be wary of those whose entire livelihood depends on selling courses but not actually trading). You can contact us for Forex mentorship to put you ahead of your peers. Admittedly, our prices are a bit higher than average, but you get value for money.
Avoid Emotional Trading
The Forex Market admittedly is not for the “weak”. This is a market you need to love enough to analyze and confident enough to risk money on and yet be bold enough to cut ties with your position as soon as you realize how wrong you are.
Take the average relationship jerk you know and multiply it by 100, yes!! that’s what I mean. In short, try to be a “playboy” literally speaking, I mean it! make love to the currency pairs, when it shows attitude, cut ties and move on to the next available pair. You get the picture!
It is as simple as I have illustrated above, but in real life, this is tough. Many forex traders for whatever reason become emotionally attached to a position they have taken in the market. That is where people go wrong with forex trading. To be on the safer side, it is best to always have certain parameters available before you even place the trade.
A good forex trader has entry rules; certain characteristics they first observe and then also an exit rule. If a trade does not meet certain rules, you cut your losses short. You live to fight another day. This is far better than losing your entire portfolio on a single market movement.
One good trading rule we use that I will share with you is very simple. This is very different from just using stop losses or take profits to exit a trade position.
We at Dorla measure momentum. If we place a buy trade, assuming this is a scalping trade, thus we expect the trade not to last more than 30 mins, if after placing the trade, we notice a remarkable decline in the buy-side of the market, i.e the velocity at which the buy bars are forming on the smaller time frame has declined in half the time of our expected trade duration, we exit and take whatever profits or losses we might have made.
This exit rule has saved us millions of times. The market velocity and momentum is a very good indication of where the market is moving or the purchasing power of the two sides of the market (buyers and sellers).
When our side is declining, we measure and exit, but how? we do this because for every trade we place, we do have a time frame in mind, which we strictly adhere to, so we can tell with certainty, that this slow down has lasted long enough. Do you have a duration for your trade?
Professional Risk Management in Forex
Risk management, the most controversial of them all. When the topic of risk management is mentioned, everyone’s attention goes to stop loss, risk and reward ratios, etc. While that is okay, professionals do more than that, they hedge!
Your average risk to reward ratios will only take you far but when push comes to shove, hedging any pair you are trading is the best bet towards doing complete risk control. Many forex traders forget this, not you. You are smart, learn about hedging, and use it as part of your arsenal against risk!
Hedging in forex trading is used to protect one’s position in the forex market against an anticipated bad forex move. In Forex, you can hedge by placing the exact opposite trade of the position you are hedging against, this type of hedging is called a direct hedge.
For example, if you are buying GBPUSD, you sell GBPUSD at the same time. The secret here is to hold the trade that goes in your favor for long, having more profits and covering up the initial losses you made by hedging. The second type of hedging is to use forex options, if you are buying GBPUSD, you buy puts on an options platform. This type of hedging provides limited protection against losses.
Admittedly hedging won’t make much money for the get rich quick forex trader, but before you dismiss it, here is a scenario to consider. It is time for a major news which always moves the market, Non-Farm Payrolls (NFP), this news always causes huge volatility and the velocity of price movements are always remarkable.
The average forex trader per his analysis thinks the news released meant the market would massively sell-off, thus he sells, with no hedging in mind and losses so much so quickly, he re-enters and losses even more money. You probably might have experienced this scenario yourself.
The experienced Forex Trader, trading with his rules place a pending order in both directions (buy and sell) with the stop loss (140pips) one as a hedge and one as his true belief in the direction of the market.
After the news is released, the market moves sharply in the buy direction for 800 pips. The experienced forex trader loses one trade of 140 pips while winning the other trade for 800 pips, after all, is said and done, this trader takes home over 660pips in profits, only by hedging.
These two scenarios above happen over and over again but the novice and emotional trader lose out while the experience one wins, why? Truth is the best traders out there don’t spend time defending their strategy, whether in the forex market or in public discussions or forums. They are not emotional about their strategies. Ask yourself, which is more important, to make yourself feel right in the Forex market or to make money?
Get the Right Mentality
You chanced on a forex trading seminar, you quickly signed up and attended. At this “amazing” seminar you are introduced to the fast life of a forex trader. On your ride back home, you are filled with passion and the possibility of making millions of dollars in the quickest way possible!
This is how many people are introduced to the business of forex trading. Listen, by now you know it doesn’t work like that. Forex has high reward potential, It is one of those industries, where risk and reward are immediate. Unfortunately, you would have to understand the business side of it and train your mental faculty first, in order to benefit from it. If you do not take this approach, you would just gift the market your money.
We learn to operate from a surgeon, we learn to fly a plane from a pilot, therefore take the time and learn to trade forex from a professional trader, before you lose all your funds in this business. As fast as you can make money from forex, you can lose it twice as fast.
Take your time and bag some pips, the right way, you can not continue to approach the Forex market with the same approach, the same thinking that causes you to lose money in the first place. You got to change.
The journey is hard, it is tough, everyone knows that by now. Luck plays a role, but what makes lack possible is your discipline and strength of character to trade your strategy to the highest possible level. You can read about straight forward ways to become a Successful Forex Trader from many blogs and websites, but if you do not implement the things we have discussed here, I doubt you would make any progress.
You would have some failures along the way, but you would succeed if you do it right and follow my lead and yes, you could be driving exotic cars, traveling in private jets, maybe that’s your goal, or your goal is to live a quiet life, providing for your family and friends and supporting society in philanthropic ways and living your best life, no matter your goals? I say to you, it is possible.
Now stop surfing the web, and start actually doing the world that would make you a successful forex trader, and do not forget to leave a comment below.