Most Forex traders don't understand that you cannot follow someone in Forex trading and win. Trading relies on taking responsibility for your trading results and if you don't understand why then you need to read this article on how to become successful as an independent trader.
In this article ,we will explain not only why taking responsibility for your trading is a key trait for success, as it is in life. We will also explain how to do it because, taking responsibility for our actions in trading is daunting for most traders.
The Blame Game
I have been involved in trading for over 25 years and in this time, I have been verbally abused and threatened with physical violence and the reason? Traders blamed me, when I was a broker for not winning with their trading signals. This was before, I offered a course and trader training and had nothing to do with giving advice – I was simply transacting their orders.
As a Forex broker, you notice, that traders will make a huge number of mistakes from over leveraging their accounts to placing their stops to close to their entry into a trade and when they lose they blame the broker (they don't stop to think their trading strategy could be the problem) so when they over leverage and had their positions taken out, because they lacked margin – they blamed the broker. When their stop got hit, it wasn't just market movement that did this, the broker had deliberately got them stopped out!
The above are just a couple of examples, of how a trader will want to blame someone else for his trading mistakes but the professional trader knows, he is totally responsible for his profits or losses. There is no hiding place in the markets when you put on a trade YOU are either right or wrong – end of story.
Why Taking Responsibility is so Hard
Most traders lack confidence in what their doing and as a general rule, most people are followers not leaders. This is the reason, that mentors and gurus are so popular in every in a wide variety of different areas from health to finance. People want to be led to success rather than discovering it for themselves.
When trading currencies this desire is even stronger and this is because the world of finance is seen as an area of nerds and highly trained professionals, who are paid large sums of money. New traders looking at these high flyers earning multi million pound salaries and automatically assume this is because their making money on the funds entrusted to them but as we have pointed out, in other areas of this site the reality is not successful trading strategies which generate profits for clients which makes these Forex professionals make money. They make their money from the vast fees and commissions, they make from client equity NOT from trading profits!
If all the banks, brokers and Hedge funds were making such great profits why would need to constantly get new clients? The reason of course is to replace funds that suffer withdrawals due to poor performance or funds that simply go bust.
If you learn to see the finance industry as it really is which is – just over paid people who are looking to maximize income from clients you will see how you can win.
The key as we have pointed out on other areas of this site is to avoid trading often and seeing commissions eat into your profits and add to your losses and be patient. You can beat any fund manager from home by just trading a few times a month. You don't need to day trade to make money ( its a losers strategy) you simply need to make sure you just trade high odds trade set ups. You should also not be worried about not having a complex algorithmic system because while most investors believe they make money – they don't.
A simplistic trading method, will always be better than a complex one and this is proven by the fact that, advances in computer technology, have made no difference in terms of the amount of traders who make money trading foreign exchange.
So we now know simple systems are best, complex algorithmic systems are a waste of time and so to is trading to short a time frame.
Steps to Becoming an Independent and Successful Trader
If you understand what we have written so far, you will probably already be thinking that you can beat a bank or hedge fund trader and of course you can. If you want to reinforce confidence try the following:
- Look up the performance of managed funds and hedge funds – its poor and very few funds can make 5% per year let alone 100 or 1,000% which many traders believe.
- Read the book the Hedge Fund Mirage by Steve Lack for how Hedge funds really make money and Liars Poker by Michael Lewis for how so called professional money men behave.
- Your opinion is as good as anyone else's! If you have a simple trading system you believe in trade it with confidence and don't worry about losing just keep losses small and profits will come to cover them and build your account equity over time.
- Consider the fact that ANYONE who becomes successful tends to do it on their own and not follow others and you can to it too. All you need is desire, motivation and a willingness to learn and your ready to achieve currency trading success.
Keep in mind, currency trading is an area of business which anyone can learn and win at – trading is a learned skill which does not require a high degree of intelligence because trading strategies which win are simple.
If you want to blame everyone for your losses other than yourself - you shouldn't be trading the currency markets. There will of course always be traders who think there is someone who can lead them by the hand to the holy grail of big Forex profits with them making no effort but their not living in the real world as we have seen and are destined to lose all the money they trade with. The good news is the world of currency trading is not as daunting as it first appears and its easy to teach yourself to trade.
Teaching yourself the basics and learning your own trading strategy is easy. If you have devised a method you understand which is based upon sound principles, you will have a simple trading method which you can trade with discipline which will lead you to long term success and guess what?
You won't be relying on anyone else or blaming anyone else but will have the confidence to trade on your own and become a successful independent currency trader from home.