Do you know that only 5% of forex traders actually know how to make money trading forex. The rest of the 95% are either stuck in a loop or are not making money at all.
The difference between the two class of traders is their knowledge, expertise and mentality about forex trading.
This is why it’s considered essential that you understand the rudiments of knowing how to make money trading forex. Doing what the 5% are doing and avoiding the mistakes of the 95%.
It’s not easy being a part of the minority forex traders who earn money, but it is not unachievable. Especially if you are just learning to trade forex.
1. Forex Trading is Not a Get Rich Quick Scheme
The only way you can truly understand how to make money trading forex is if you are able to erase this mentality out of your mind. Forex trading cannot take your $10,000 to $1 Million in 12 months.
Your strategy should be built on trading in bits, don’t be too greedy, else you’ll lose it all and join the majority that has something bad to say about forex trading.
We are not saying forex trading is not a profitable endeavor, but it takes time and patience to make good money out of forex trading. Don’t be one of those traders that targets between 50% to 100% profit annually, slow and steady, you’ll get to the top.
2. Excessive Leveraging Can Be Your Winning Strategy To Lose Money
In what is supposed to be a profitable strategy, by leveraging too much, you can find yourself in a losing position. You are not expected to go all in with your trading account in one or two trades, it’s suicidal for you as a trader.
Even if you are sure of your edge as a trader, there are still chances of errors wiping out your entire trade. With one or two unlucky trades, you are wiped out completely as a trader and left to start all over again.
3. You Can Do The Opposite of What Everyone is Doing and Win
Use sentiments to tilt the odds in your favor is an option that works if you know your odds as a trader. This is where the Speculative Sentiment Index comes into play and one that you should adopt for your everyday trading.
Using the SSI, you are provided information on the number of traders going in different directions. With the information, you can decide not to follow the bandwagon of traders.
Employ it as a direction filter for your trades.
4. Never Forget To Do Your Homework
As easy as it is to get into forex trading, it’s even easier to get burnt as a trader.
You cannot afford not to do your due diligence as a trader. There is no shortcut to knowing how to make money trading forex if you seek only shortcuts.
You need to constantly stay on top of regulations, market conditions, and world events. This will allow you to be able to predict where the pendulum is swinging and how to position your trades.