The Right Mindset
Let me tell you something, if you trade Forex just because you want to be a millionaire in one night, then I suggest you to stop trading, for your own good. The reason why I say this is because it is almost impossible for you to be rich in a very short period of time from trading Forex. The only chance this will happen is by LUCK and luck doesn’t last forever. You probably risked all of your money in one trade and you got lucky, the trade is a winning one. Boom, you are rich! For now. you feel like you are the GOD of trading. You are invincible. You do the same thing again. You risk all of your money in one trade. And then BOOM! You find yourself in a very deep sh*t hole. You look at your account and you just lost all of your money plus the profit you just made. Sound familiar?
This is not how you trade and no pro traders trade like that. The main reason why newbie traders lose their money in a short time is because they THINK they can make MILLIONS OF DOLLARS out of a $100 account. This is just insane. No other traders or robots can do that, bro! Stop day dreaming!
FOREX TRADING IS NOT A GET RICK QUICK SCHEME
Pro traders risk a small portion of their money in one trade and the reason why they can make hundreds of dollars because they have MILLIONS of dollars in their account. Think about it in this way : you have 1 Million dollars in your account and you risk 1% in one trade. What is 1% of 1 Million? $10,000! How much money do you have in your account? $500? What is 1% of $500? ONLY $5!!
Most of us only have a small amount of money in our account and sometimes we do not really care about risking more money because we do not see it as SIGNIFICANT enough. For example, you only have $500 in your account. Based on your trading rule, you know you can risk no more than 2% of your account. But because 2% of your account is ONLY $10, then you tell yourself : “it’s only $10, it’s too small! I should risk more! I want to get more!” So you risk more, let’s say $50, because it is more SIGNIFICANT to you. But guess what, $50 is 10% of your account!! If you lose the trade, you lose 10% of your account. Losing 10% of your account in one trade is the stupidest thing to do in trading world.
Let’s change the situation. Let’s say you have $100,000 in your account. With the same rule as the one above, 2% risk of a $100,000 account is $2,000! If you risk 10%, you are risking $10,000 in one trade! So in this case, would you risk 2% or 10%? Would you lose $2,000 or $10,000?
From the example above, it is clear that the more money you have in your account, the more significant it is in terms of the amount of risk you are putting. 2% of $500 is $10 and 2% of $100,000 is $2,000. The percentage is the same but the AMOUNT OF MONEY is different. Do you see what I am trying to say here?
So, be careful when choosing your trading goal. Aiming to make 50% or 100% in a month is basically killing your account slowly; the process will be hard as hell and the result will be its death.
You cannot, I REPEAT, you cannot match the money pro traders are making with your small account. Once you understand this, you will think twice before you enter your trade next time.
So, instead of wanting to make 1,000% growth of your money, why don’t just aim to get, let’s say 10% a month? Try getting 10% a month in 6 months in a row and you will know how difficult it is. Of course, you can grow your small account into a giant account, but it WILL take time and you need to have a specific method to achieve it. I will talk about this in the Final Chapter.
So in conclusion, yes, Forex trading CAN make you rich but it TAKES time. It is a marathon not a sprint. Your goal is to survive as long as possible in the game. You cannot be rich overnight. Adjust your trading goal based on your capital, risk appetite and your trading experience.
GO TO PART 2