The best trade of course is no trade at all – you stay out the market and making the decision not to make a trade is actually, a trade in itself. Not trading is the safest trade of all because you can't lose money. Most novice Forex traders, will be bemused by this concept but that's why they lose. Most losing Forex traders simply do not realize, how risky the currency markets are so let's look at this concept in more detail.
Losing Traders and Over Trading
Lets start with how losing trader view the currency markets and these are the commonly held belief these traders have:
Forex markets are moving all the time, so you need to be in and trading them to catch the big moves – if your not in the market you will miss big trades. Markets are moving so you need to trade them and the more trades you make, the more chance you have of making profits with your trading signals.
This view of the markets will see any trader lose money with their currency trading strategy and is based upon logic which is false. The idea that currency markets are volatile and are moving all the time is correct but that doesn't mean, there are high odds trading opportunities all the time.
Sure you could miss the start a big move if you are on the sidelines but you will only miss the start of the trend and if your a smart trader, if a big trend does develop, you will have plenty of chances to get on board and make money from it. Its a fact that most successful traders, don't try and get in at the start of trends - they wait until they are confirmed and then put their trading signals in when they see the odds are at their best.
The work ethic you are used to in normal day life and in a 9 – 5 job does not apply to trading the currency markets. Losing traders tend to view the markets as a fun place and one where the more effort they make, the better their chances of success will be but this is simply not true. In a 9 to 5 job, you will get paid for overtime and the work you put in but putting in extra work in the Forex markets is not guaranteed to make you more money on the contrary, it will reduce your chances of making money.
The currency markets simply don't give high odds trades every day, so making to much effort or trading to much will not improve yourchances of FX trading success. You need to think about cutting down the trading signals you transact and only, looking for the best trades. To learn the concpet of trading less to make more, you can learn a lot from animals in the jungle in relation to this key point.
The Jungle What you can Learn from it in Relation to Forex trading Success
If you ever watch any wild life programs and I am an avid watcher, you will often see animals preying on others but they never move quickly in for the kill – it can be a bird a fish or a mammal but you will notice one common trait they have – they will circle their prey and will only move in for the kill, when their certain of getting their prey.
When trading currencies the same rule applies, you watch your charts and indicators until the set up gives you the best chance of success and then, its time to move in and transact your trading signal. What you have done is to wait, until the odds are at their best in terms of making a profit from a currency pair. Just as an animal in the jungle, has waited until his chances of making a kill are at their best, you have shown patience to increase your odds of success.
The Risk of All Trades is:
The experienced trader knows, that while they think they can win money as soon as money is committed to the trade – there is ALWAYS a chance of losing so why make a trade when the odds are not at their best?
There is no reason to and the experienced trader knows this. His aim is to win on as many trading signals as possible but trading just for fun or to try and force profits from the market is not part of his trading strategy - he knows unless the odds are at their best – the best trade in currency trading is no trade at all.
The Forex markets are a jungle, where only the fittest survive and to survive the jungle, you need to keep your equity intact and this means waiting for the right opportunity to strike – If you want to win, learn from animals that prey in the jungle on others – their patient and wait for the odds before they go in for the kill and you need to adopt the same attitude.
The best trade is no trade with your trading strategy most of the time and if you learn this currency trading tip, you will only strike at the right time and if you do, you will have far bigger kills (winning trades) than misses ( losing trades) and will achieve long term profits. You may not trade much and you may not make a lot of effort but you will achieve profits on your trading account.