3 Things you must conquer to be a successful forex trader

GreedGreed is probably one of the biggest dangers to successful forex trading.The possibility of the big winning trade that will make them rich is always
looming in the mind of the novice trader and experienced trader alike. Many
people look at forex trading as a get rich quick scheme rather than the
legitimate business that it is. They have unrealistic expectations. There will be
times in your trading career that the lure of the big payoff will tempt you. You
will have your strategy in place, your trade set up, then a greed attack will set
in clouding your judgement. If you want to be a successful forex trader you must
learn to overcome greed and not seek the "home runs" but learn to follow a
strategy that over time will regularly bring you small but consistent wins and
growth of your account.
Fear Because of fear, people look for the perfect forex trading system that
will guarantee the most success with the least amount of risk.Fear will cause a
trader to think irrationally. His judgement will be clouded. It will cause him
to:Take trades when he shouldn'tNot taking ones that he shouldExiting too early or at the wrong time when the market is going against him.
What are the causes of this fear.
1) Fear of the unknown. Specifially, fear of not knowing whether a trade will
work out or not. What is the remedy?Having an effective forex trading strategy you will have confidence that in the
long run it will work out. You may have a few losses but you know that you will
have more wins than losses resulting in an increase in your trading account.
2) The fact that you are risking your own money.An old horse trader once said to me that: You learn the most about buying and
selling when you start trading with your own money. The same is true with forex
trading. When you are trading with a demo account which allows you to trade in
real time but with fake money,you don't think the same way that you do when you
begin to trade with real money that is yours.
How do you overcome the fear of losing your own money. Simple, only trade with
money that you can afford to lose. In other words, trade with money that if you
lost it would make no difference at all to your current financial life. That is
why it may be best to start with a mini account that allows you to start trading
with as little as $300.00. There are even brokers who offer "micro accounts" that
allow you to start with $25.00.
Lack of patience.Along with greed and fear,lacking patience will also sabotage any success you may
have as a trader. Why is patience required? Because forex trading is boring. It
is not glamorous or exciting. It requires patience to wait for the right trade to
set up. The problem is that alot of traders are anxious to make money now. They
then force a trade when they shouldn't in a effort to outsmart the market. But
the market will go its own way regardless of how smart you are.
The bottom line is: If you want to be successful in forex trading, you must be
patient, stick to a certain strategy, practice good money management,and banish
greed and fear. If you do this you will have long term success as a forex trader.
To see a strategy that is simple and gives good long term results see Avi
Frister's course, Forex Trading Machine.

How a stop loss can work against you in Forex trading.

Proper money management in forex trading is essential for long term successful trades. This usually means among other things, setting a stop loss to control losses. The tricky part is how much of a stop loss should you set? If you set too much of a stop loss you are exposing yourself to excessive risk and the possibility of losing a large amount if the trade reverses. On the other hand if you set too narrow a stop loss you run the risk of being stopped out of the trade if the temporary retracement goes beyond your stop loss and then resumes the original direction.
I learned the need for this on a trade I did today. The trade signals were strong and an entry signal was triggered. I entered the trade, set my take profit level, and set a narrow stop loss of about 15 pips. It was a long trade and it was going well and strongly moving in the direction that I wanted it to.
Then a correction came which always comes and usually is not a problem, however, being overcautious and conservative,it worked against me and the reversal was more than my stop loss. I was stopped out of the trade with a 14 pip loss. The trade then shortly reversed again and continued in the original direction. If my stop loss had been set at say 25 or 30 I would have been able to meet my profit objective on the trade.
Lesson learned: Set a wider stop loss. On the EUR/USD this should probably be at least 30 pips since most of the retracements are within this range.
The reason I set such a narrow stop loss is because of the fear of losing more than I was comfortable with. Remember, in a previous article I told you that this is one of the things that kills long term success. Here is a real life situation.
Of course, a wider stop loss is recommended in the Forex Trading Machine which is the system I am using. I thought I could do better by being more conservative. Then I realized that Avi Frister, the author, knows what he is talking about.
To read more about Avi Frister's Forex Trading Machine go to:
www.myforextradingstrategies.com

67 per cent winning trade

Today I traded the EUR/USD and ended up 7.1 pips. I did three trades and lost one. This works out to be a 67% win ratio for today. I did these trades in about 40 minutes time.

I have to admit that I was tempted to trade again even though I wasn't sure a good trade was setting up. The excitement of early wins paves the way for that greed factor that I talked about in a previous post. Luckily I resisted it.

Like I said greed, fear, and lack of patience coupled with poor money management practices will sabotae your trading success.

Of course, all this and more is taught in Avi Frister"s excellent e book,
The Forex Trading Machine. To find out more go to: http://www.myforextradingstrategies.com/

The biggest danger to successful forex trading.

Greed
Greed is probably one of the biggest dangers to successful forex trading.
The possibility of the big winning trade that will make them rich is always looming in the mind of the novice trader and experienced trader alike. Many people look at forex trading as a get rich quick scheme rather than the legitimate business that it is. They have unrealistic expectations. There will be times in your trading career that the lure of the big payoff will tempt you. You will have your strategy in place, your trade set up, then a greed attack will set in clouding your judgement. You may see a strong trend developing and will try to get 30, 40, 50 or more pips out of it. The problem is that many times it peters out and reverses on you resulting in a loss rather than a gain. All because you weren't satisfied with the small win and were trying for the "home run". If you want to be a successful forex trader you must learn to overcome greed and not seek the "home runs" but learn to follow a strategy that over time will regularly bring you small but consistent wins and growth of your account.

To learn more about the proper mindset and strategies to successfully trade the forex market go to: www.myforextradingstrategies.com