FOREX TRADING IS NOT ONLY ABOUT TECHNICAL ANALYSIS
A lot of people who I have met, always ask about the best indicator, the best system, etc. When I ask them about money management and psychology of trading, they say they understand it. They say they have learned about them all and what they need is the best system. Well, if they DO understand it, they would not ask me the question.
What I am trying to say is this : so many traders spend most of their time only learning technical analysis, new indicators, new systems, and so on. They do not spend enough time to learn about other things; money management and psychology of trading, which are far more IMPORTANT than technical analysis. (Check out my blog to learn more about forex trading). Remember this : you do not have to understand every aspect of technical analysis to be profitable. I do not understand all of it either. You just need to master the part of technical analysis which is needed for your trading system. It saves your time and energy. Trust me.
I am not saying technical analysis is not important. It certainly is. But you cannot be successful traders by only studying technical analysis. You need strong money management skills and psychology level.
In conclusion, choose one trading system (really, choose one!), master the part of the technical analysis it needs and then focus on being disciplined and consistent. (if you are not consistent, it can be seen from your trading performance).
INCOME FROM FOREX TRADING IS NOT CONSISTENT
Alright, this is important. In the world of financial markets, nothing lasts forever. You cannot make money all the time despite what you hear from advertising out there. You SHOULD not expect to make money all the time either.
Every pro trader out there WILL experience losses. Losses are inevitable in Forex trading. It is just how it is. Nobody knows whether they will make money or not at the end of the month. Because of this reason, you should not expect consistent/regular income from Forex. The problem is so many traders want to trade for a living. But what they do not understand is, income from Forex trading is not the same as the salary you get from working ; you don’t get income from Forex every month. There will be losing months and winning months. What are you going to eat when you are having a losing month?
To be a full time trader is what every trader wants but does not mean it is for every trader. You need to be very skillful and experienced enough to trade for a living, not to mention having enough capital to trade. If you cannot make money with a small amount of money, how do you expect to trade for a living?
In conclusion, it is better to have other sources of income while you trade Forex. Income from Forex trading can be extra money for you so if you don’t make money from Forex, you still have income for living. When you reach consistency, you can slowly increase your capital then it will automatically increase your income from Forex. Reach consistency first, then trade big money.
GO TO PART 3