by Richard Cox
(New Haven, CT, USA)
Starting with Realistic Expectations when Daytrading Forex
What most traders fail to realize is that the first mistakes of forex trading happen even before any positions are initiated. New traders looking to get into the world of forex generally have visions of great wealth that can be accumulated quickly and with little or no market research or trading effort. Unfortunately, there is no way this could possibly real reality of the markets. Anything worth anything in life will take a great deal of time and research energy -- and the forex market is no different.
“If you are beginning your trading career or if you have had some unsuccessful trades in the past,”said Haris Constantinou, currency analyst at TeleTrade,, “it is very important to remember that accurate trade forecasting will take time and there will still be some uphill battles along the way.” Essentially, this means you will not be able to turn a $500 account into a $10,000 account in a month -- even if there are blogs or trading mentors that will tell you this is possible. There will be ups and downs along the way but as long as you approach the markets with an understanding of this (and be conservative in your methods and expectations), you will be able to construct a career in the forex markets that enables you to trade and make money over the longer term.
Stable Growth, Not Killer Gains
Your main concern as a forex trader should be to keep your account open, healthy, and growing in a stable fashion. This does not mean that you will not have losing trades. In fact, there are even situations where successful traders can lose a majority of their trades and still be successful over the long term. In these cases, losing trades must be much smaller than winning trades. But the main point here is that you should not expect (or even want) 100% of your trades to work out favorably. This is a completely unrealistic scenario and it should be removed from your trading psyche immediately.
Perhaps the largest mistake that new traders make is seen when erroneous expectations lead people to believe that forex trading is similar to winning the lottery or a “get rich quick scheme.” If this was the case, we would not see the amazingly high numbers of losing traders that are forced to exit this industry after losing an entire trading account. Instead, you must remember that trading in the forex market is a business like any other business. There will be gains and losses but the one constant will always be that you must do diligent research and not expect anything to be handed to you. Any success you have in the forex market will come as a result of hard work and attentive research.
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