Why Its Virtually Impossible To Make Money As A Retail Trader.

Make Money As A Retail TraderI say virtually impossible. It is possible to make money as a retail trader but the odds are firmly stacked against you. The statistics show that only 5% of retail traders make money consistently, but in reality the chances of success are probably less than 3%.

So taking into account that only 3% of traders that start out on this journey, achieve consistent profitability, why do so many people still want to get involved in Forex trading.

Well i suppose its for the same reason that people play the lottery. I don’t play the lottery by the way. I have no desire to throw away my money on a 50 million to 1 shot.

But taking into account the odds of lottery success, Forex trading success is a much better option.

Financial freedom, working hours that suit, spending more time with friends and family, working from home, being your own boss. These are all reasons why people get involved in Forex trading.

All of these reasons are valid, and attainable as a Forex trader, but they come at a price. Nothing in life is free, but you get out what you put in.

Determination, desire, discipline, dedication, are qualities that you need to be successful, but without education the other qualities will not be enough for Forex trading success.

Why is it so hard to succeed as a retail trader?

Here are some reasons why retail traders fail to make it in this business.

Not enough capital.

This is something that causes a lot of traders to fail. Most retail traders are sold a dream, a dream that they can turn a 100 bucks into a million bucks, when in fact that really is not how trading works at all.

not enough capitalIf you only have a 100 bucks to fund your account, just forget live trading, because you will only lose your 100 bucks. If you go down the same route as the majority of traders, then you will probably blow a min of 3 trading accounts before you get to any sort of consistent profitability. That’s if you are lucky.

Top tip: Divide your start up capital into 4 lots, and open your first account with a quarter of your start up capital. You then have enough money to fund 3 blown accounts, and still have something left to trade with.

Poor trading education.

If you have enough capital to fund 4 trading accounts then getting the correct education is a must to give you any real chance of success. Everyone thinks you can teach yourself how to trade by reading books, or watching trading videos on YouTube. Although you may be able to learn the basics this way, you can only be successful in the Forex business if you are educated by a professional trader.
trading education

This job is a lot harder than it looks, and paying a professional to teach you how to trade correctly is the only way in my opinion that you can move forward and get consistently profitable in your trading.

You want to make money in this business, and you want to be able to do it in as little time as possible. By trying to teach yourself to trade you are doing the complete opposite. You will lose money, and you will lose time. The only thing you will gain is stress.

Investing in a professional Forex training program will save you a lot of money, a lot of time, and a lot of stress.

Lack of discipline.

Discipline is something that a lot of traders struggle with. Fear and greed is one of the biggest reasons why traders fail. Having the knowledge needed to be successful will not be enough if you cannot control your discipline.
how to control fear and greedWarren Buffet is probably the best example of a trader that is 100% unaffected by fear and greed issues.
He is one of the richest guys in the world but he has not made his money by being greedy, or by being fearful. He has made his money be being clever, and very well informed.

Its a lot easier to control fear and greed issues if you have the correct education, but it can still cause traders problems.

I like to think of trading in the way you cross a busy road. If you have not been taught how to successfully cross the road, the chances of getting squashed by a bus are very high, but even when you know how to cross the road, there is still a temptation to go for a small gap in the traffic, and try to make it to the other side without waiting for the road to become clear so you can cross safely.

Trading is about waiting for the road to become clear, so you can trade safely.

False beliefs about the market and how it works.

Most of the education available to retail traders either online, in books, or in other training courses is poor to say the least. Some of it is bordering on madness to be honest, but traders still pay for, and dedicate time to learning this crap, and it will not help them one bit in their trading journey.
false beliefs about how the market works
Some well respected Forex training providers have no idea how the market really works, and importing this knowledge into traders heads is leading to false beliefs about the market and how to trade it. These false beliefs will make it impossible for a trader to make money consistently.

But because the trader does not know that what he or she believes is false, they blame their failures on a lack of discipline, when in fact the problem is a lack of knowledge.

So whats the answer?

Well the answer is to hire a professional trader like myself to teach you how to trade. And if you think its too expensive to hire a professional trader, just think about how much it will cost you if you hire an amateur.

Thanks for visiting my blog, have a great day. 🙂

How To Control Fear And Greed In Forex Trading.

Fear and greed are a Forex traders worst enemy. Knowing how to control fear and greed in Forex trading will help you to become a better trader.

The key to making money in the Forex markets is to trade logically without emotion, and if you can remove fear and greed from your trading and trade logically, you will make more money from your trading activities.

What is fear and greed?

Fear and greed are pretty simple concepts to understand, and they are intertwined in the majority of Forex traders psyche. Everyone gets into Forex trading to make money, that is the sole objective of trading, but the fact is the majority of Forex traders lose money in the markets. Not being able to control fear and greed will cause traders to trade emotionally and make irrational trading decisions, which will ultimately lose them money in the markets.

How to control fear in Forex trading.

There are many types of fear in Forex trading, but the fear of losing money is probably the biggest one. Depending on your personality type, some traders will be more prone to fear than others. If you are a trader that has a big fear of losing money you can mitigate that fear in 3 ways.

how to control fear in Forex trading1. Reduce your lot size. If you are trading with a lot size that you are not comfortable with your fear is greater, and your chances of making an emotional irrational decision are greater if you are trading this way.

2. Set a stop loss on every trade.
Knowing how much you are prepared to lose on every trade will help you overcome fear. No one wants to lose money in the markets, but if you know your potential loss in advance, and you are comfortable with that, you will not be trading emotionally and making irrational decisions.

3. Understand the market. This is the biggest fear of all in my opinion. And the hardest one to overcome. Lack of market knowledge is the major reason why traders fail, and is the difference between the 5 and the 95%. Many traders think they understand what they are doing, but the truth is they don’t. You have to fully understand what is going on in the Forex market to become a successful Forex trader, and this understanding will greatly reduce your fear.

Fear of the unknown is the hardest fear to overcome. If you think about other types of fear you may have experienced in the past, this will give you an idea of how important knowledge is, in overcoming fear.

Many people may have had a fear of exams at school, because they wanted to do well, but they did not fully understand the subject.

Some people may have had a fear of driving a car, because of a lack of understanding, but now they drive successfully every day.

When you started your first job you may have had a fear of going to work, because you were not familiar with the roles expected of you, but now you go to work every day without fear.

Can you see a pattern here? The pattern is knowledge. Knowledge lessens the fear of all these fearful situations, and Forex trading is exactly the same. Having the knowledge needed to enable you to trade with confidence, will take away the majority of your fear.

How to control greed in Forex trading.

As we have established greed can also play a big part in the success or failure of a Forex trader. There are various types of greed that will attribute to your failure as a trader, but the main one is trying to make money on every market move. Trying to make money from every move in the market will cause you to chase after market moves, and over trade, and if you are chasing the market and over trading you are trading emotionally, and you will lose money. Here are a few tips you can use to help you overcome greed.

how to control greed in Forex trading1. Make pips not money.
Its not how much money you make, its how many pips you make that counts. If you are trading 50 lots per pip you can make £3000 per week from just 10 pips. So don’t get greedy and chase after the big money every week, just concentrate on making pips. When you are consistently making pips, week in week out, then you can increase your lot size to make the big money.

2. Be realistic with your expectations. You have to learn to accept that you cannot make money from every move in the market. You have to be satisfied with the pips you do make, and not get frustrated by the pips you miss out on. Getting frustrated by missing out on trades, will cause you to trade emotionally, and chase after those missed pips.

3. Learn to trade. Making money is a by product of trading successfully, but the majority of traders will try to make money first, and then learn to trade, after they have lost a lot of money. Which does not make a great deal of sense, but that’s what happens. The majority of traders that come to me for training and mentoring, have already lost a lot of money in the markets, before they decide to employ me to teach them how to trade.

Summary. Knowing how to control fear and greed in Forex trading will help you to become a better trader, but the biggest obstacle to overcoming fear and greed is a lack of knowledge. Knowledge will give you the understanding you need, to enable you to trade without fear and greed, and consistently make money from Forex trading. Not knowing how to trade correctly, and chasing after the big money, will cause you to trade emotionally, and ultimately lose you money. Trading is not easy, but understanding the market will help you to control your fear and greed, and make you a profitable trader.

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