A few years ago I had the chance to educate and help a Forex trader who was seeking to become a full time Forex trader and trade for a living. He asked me to coach him one on one and he wanted me to be his mentor. I shared many of my Forex secret trading methods and after only a few months of training he was already profitable and trading full time. We are still working together on strategy development and market research.
During the time I trained and mentored this trader I was able to find some of the primary faults he was committing that kept him for years to make consistent profits. In this article I would like to share with you the primary errors this skillful but unprofitable trader was making and how we improved them.
Having unrealistic goals, big expectations lead to big failures: I am a believer that without goals you will not get anywhere in life. On the other hand, I believe that setting up surrealistic goals and having really big expectations from one trading idea usually leads to big disappointments and losses.
Successful traders are able to make fabulous profits because they concentrate on the profits and they do not get married to any trading idea. They realize that if a trading idea is not working, it is better to cut your losses and find another one.
Risking capital funds you cannot afford to lose: Another huge mistake this trader was committing was that he was trading with his family's living capital funds. Things like your mortgage payment, your daughter college tuition money or your car insurance money are funds you should never trade, even if you are professional currency trader. In the Foreign Exchange Market, FX market there is a very thin line between good trading opportunities and chaos and for numerous Forex traders they just happen to be in the market at the wrong time.
For this reason I always ask my traders and protégé es this question " What would happen if you lost all of your trading funds ?" . Most people respond " I would be very upset " or " I would go bankrupt ". Well trading under these circumstances is a mistake; remember of only trade with money you can afford to lose.
Putting all the eggs in the same basket: Pro Currency traders NEVER get married to a trading idea. The reality is that the FX market is always changing and a lot of times your super efficient trading system gets unprofitable just because the markets have converted. As a result, it is highly suggested to never put all your money into one trading system. Always have a fall back plan and never trade more than trade 20% of your total net worth.
Your net worth is your personal monetary power. For instance, if you happen to have $ 250, 000 in the bank, $ 350, 000 on Real Estates, and $ 20, 000 into a hedge fund your total net worth is $ 620, 000. Then 20% of $ 620, 000 is $ 124, 000 so a person with this net worth should never trade more than $ 124, 000. Money management and capital management is extremely important.
Trading based on what you hear around: I have constantly said it, you cannot earn money by just listening to other individuals. You need to learn your trading style, do your homework, and master the basics of FX trading; no one can do this for you.
I hope you enjoyed this article. I will be posting more and more exclusive Forex secret trading tips very soon.
