Start An Online Business - Currency Trading

 Why Your Trading Is Doomed

Even the best trader in the world can only make up to 30% average return per year and yet you are fooled to believe that you can make better than that. Many profitable trades are offset by losses brought about by potential wins went wrong. If only one can know before hand which trades will be profitable, the losing trades can be avoided. However in reality, this is impossible and this is why we have to assume that all trades will be profitable and hope that the winning trades offset the losses.

A common mindset of new traders is, risk is acceptable to a larger degree while profits must be locked as soon as possible. This is evident in many forums that highlights the use of trailing stops as small as 10 pips. If you have traded long enough, you will realize that even 60 to 100 pips can be considered as market noises and they are virtually unpredictable. So any small trailing stops are bound to be hit. Given the small capital that most new traders have, they are left with no starting an online business for dummies 5th edition but to employ such ridiculously small stops. When a trader has a small profit, the greed and fear kicks in that even before the target is reached, the trade is closed with a small profit. This may seem like a safe option, but in the long run, it is the system that matters. What guarantees success is a system that is religiously followed. Emotion and greed have no settings or parameters to be fiddled with, and they are truly subjective. So how one can determine which 'settings'of greed and fear that work best? This is where a system comes into play. A good system takes away the emotion and greed. A good system has parameters and settings that can be fine tuned unlike emotions and greed. And when the best settings are found, the system can be used with huge success no doubt it will never be perfect.

In real world, the successful and wealthy traders made their fortune slowly and steadily through careful risk management and very wise leverage use. However as a small business cost low leverage may be too slow. There are ways to make profit like the hedge fund managers using high leverages, but these methods are often overshadowed by the false promises of so called forex gurus and brokers that entice newcomers with ridiculously high profit potentials.

Every method that you employ will fail to work if these methods of trading management are not employed. After scouring numerous sites and forums, I have never seen any traders utilizing these trade management ideas. Now this sheds some light on the saying that 90% of traders often fail!