Hey Traders, I wanted to talk to you today about the "Forex Trading is Easy Money" Myth.
The following is a fact. Most new traders come to trading with an expectation of making massive returns in a short period of time.
Everywhere you look, trading sites and forums make claims of massive, almost instantaneous, easy money returns. This is just not true.
Let's face facts, if it was that easy, everyone would be doing it! And if everyone was making huge gains, then the brokers and market makers would be out of business pretty quickly.
The Next Best Thing in Forex Trading
Everywhere you turn and everywhere you look in this market, you will find a vendor trying to sell you the next "best thing". Systems that require little to no effort, that cost a few bucks and can be run on accounts with initial equity of less than $100.
Really?! Why is it that these vendors exist? Why is it that thousands and thousands of people every day are drawn to purchasing these products, only to find out what is promised is false returns?
Ask yourself these two questions:
- What do I believe is a reasonable expectation as far as a forex trading investment return?
- How long and over what period do I expect the above forex trading investment return?
Let's talk about a "reasonable expectation for a forex trading investment return". If your answer to question 1 is >50%, then you need to realise that this is not a given in forex trading. >50% returns are hard to achieve simply due to the nature of the markets.
Forex Trading is Hard...
Forex trading is hard. Anyone that tells you any different is not a real trader. Trading takes dedication, focus, education (lots & lots of education!), discipline, screen time (staring at charts and analysing them) and a real commitment to the markets.
You also need to be able to accept defeat in Forex trading. Lots of defeat. In fact, many of the most successful traders in the world lose more than they win. They understand that losing is a part of the business, and success in this business is minimising the amount you lose, and 'keeping the powder dry' to 'stay in the game' is key.
Are you starting to get the thread here? Many vendors will tell you forex trading is easy because they want to sell you something to realise your dreams. Problem is, the greater majority will sell you a product that grabs your dreams, throws them on the floor and stomps on them repeatedly, again and again.
Are My Forex Trading Expectations Unrealistic?
OK, so now we know Forex trading is hard. Let's talk about "how long and over what period you expect your forex trading investment return?" I think even more important is the question "am I telling myself I can make a huge return in a short period of time?"
The Forex market is littered with people that saw the twitter pics and Instagram's of some nondescript person wearing a Rolex, smoking a cigar and driving a Bentley. Yeah right! Most successful traders are too busy scouring the markets for their next opportunity to be taking photos of their successes.
Realistically - if you can answer that you are not looking for instant returns, and that you are prepared to go on a journey to make decent returns in Forex trading, you are already ahead of the game.
Anyone that tells you that Forex trading is easy is flat out lying. What would a large investment return be from a bank or alternative financial institution? 20% per year? Is that not almost too good to be true?
Forex Trading Beliefs
Why do traders believe that the market(s) they are trading are going to generate astronomical returns? Because tens of thousands of websites make their living from letting you believe this. It is the myth of Easy Money.
I mentioned it earlier, but it bears repeating. Everywhere you look, trading sites and forums make claims of massive, almost instantaneous, easy money returns. This is just not true. They do this simply because they know it is human nature to want to be able to do things in an easy manner. Promises that "you will double your Forex trading account in no time and make easy money."
Don't believe the hype. The traders that can make serious triple digit returns are like Sumatran Tigers. They almost don't exist. You are mistaken if you decide to start trading because you think that making 100% returns is easy.
Sharing Forex Trading Results
This is why almost all traders on the internet do not share their results. And if they do, they are demo accounts, or they have messed with the results. It's not hard to fake a decent (sometimes astronomical) return over a short period of time.
It's one of the primary reasons I decided to build The Forex Laboratory. I want to show people how an average guy from the suburbs goes about his day to day trading.
I am no different from the average person who wants to get involved in Forex trading. I just have a lot more experience under my belt, and have made more mistakes than you or I can count. I'm sharing a lot of these experiences in the hope I can save you some time on your trading journey, if you so choose.
This is the reason I started The Forex Laboratory. I'm trading using multiple different systems and sharing the results. It's updated daily with all of my trades as I take them, and the results are published the moment they happen, win, lose or draw. If I can do it anyone can, with a little help from a mentor or educator.
Forex Trading Holy Grail
Because there are so many new traders entering the Forex trading market each and every day, more and more people fall prey to false economies. Many new traders see trading as a super easy way of making money. They fall into the hands of the "dream sellers" and waste a lot of time and money.
They keep searching for the 'holy grail' that is going to make them rich in a very short period of time. You are more likely to win the lottery. Failure then leads to purchasing more tools, systems and strategies in the hope of "making it big" once more.
Pretty soon you start telling yourself that you "have to trade". This is a terrible position to be in. One should never be in a position where they have to trade. Trade for fun, trade because you are passionate and dedicated to trading, but never trade because you feel you have to. This is the quickest path to trading disaster.
You may ask me how I'm qualified to say all of the above? I know all of this because I have lived it. I spent thousands of dollars trying to find the holy grail. I was in a position where I told myself I have to trade. It all went terribly wrong, not just for myself, but for a few of my close trading buddies.
I made countless mistakes. And I want to make sure you make many fewer. And retain much more trading capital than I did to start with.
Discipline is the key to understanding why you should:
- Practice trading for a long time before you start trading real money
- Make sure that your losses are small - always
- Go for some good quality winning trades
- Learn to lose - because you will lose - you may even lose more often than you win
- Be prepared to be realistic about your trading returns
I have a lot of experience losing. I lost a lot more than I won for a long time. It took me many years to learn discipline. I could not make profits consistently without discipline. Discipline is key.