Retail FOREX Trading indeed offers a lucrative source of income without having to establish a business which would require a business permit, an establishment, a product to sell, manpower and inventories etc.
That is why more and more aspiring traders are looking into it.
Just like many of you, I have started trading with one purpose, “To Make More Money”. To make an additional source of income that could help me reach my financial goal which will then later help me to quit my 8-5 day job.
I started trading with NO formal training, no formal education, just a self study and a lot of trial and error.
With the high intention to make a quick money immediately, after a month of Demo Trading, I have decided to start trading live with a $200 capital without knowing what my strategy is.
Too Risky right? This is me before, I feel that all of my hard work researching and studying online are not worth until I try it on Live.
And to cut the story short, I burned 3 Live Accounts in my 1st year of Trading. It turns out to be so frustrating that almost I decided to quit. I feel helpless with all my efforts are gone.
But it didn’t stop me, I feel that this was really for me. I love seeing my chart, I love being bored about waiting for the opportunities..
And with the determination to get back and pursue it seriously. Returning back to the drawing board has been a wise decision for me.
I started learning as much as information as I can from Free Blog website, to paid books, paid courses and consistently learning everyday. I followed and literally stalked those successful traders, join groups and paid an exclusive mentor and watch YouTube training’s.
I return back again on the demo account to polished my Trading Skills while saving enough capital to go Live again. And after 3 months of sacrifice, my Live Trading is now revived and every actions I make, every trade decision I take started to click and goes on my favor.
Thanks to the following 6 Forex Trading Facts I wish I had knew it first before jumping into live trading.
(1). Beware of Forex Trading Get Rich Quick Scheme
Is there someone offers you “a guaranteed 100%, 200%, 300%” return of investment?
Have you experience attending on a seminar and conduct training’s but at the back-end they are selling a trading software which entice “a guarantee profit”? and what’s worst is that it includes a monthly fee for subscription.
Or you might probably invest an amount and just waiting for your share of profit?
Are you seeing some trading result on your news feed with big amount of returns?
This are only the common schemes which attracts aspiring traders which leads them to a wrong impression and unrealistic expectations.
Luckily, I never get involve in any of this, because I took the path on learning the hard way before I even realize to invest on my learnings and paid from programs and courses over the internet. However, I am very much aware of the following scenarios, because I do have friends who tell me their sad story.
And the thing here is, Forex Trading is like any other business out there, It needs to be established, cultivated before you can reap any rewards.
There is no such thing as GET RICH QUICK in any other related business. Forget about that Instant Money! Forget About that lavish lifestyle, Forget about quitting your job and just focus being a Full Time Forex Trader.
If someone offers you a “fixed income return” on a weekly, monthly or even on a daily basis, get out as fast as you can.
Every successful business that you know does not reach their highs overnight. They fail and make mistakes over and over again until they meet Mr. Success.
(2). FOREX Trading Does Not Offer a Shortcut To Instant Wealth
While this is much related to item #1 Contrary to what you have read on website, social media channels, FOREX trading does not offer a shortcut to instant wealth..
You cannot turn $1,000 to a million dollar overnight. Forex Trading requires a professional skills which requires years of experience, practice and mastering the craft. And as a Professional, you need to learn, study, practice and improved your skill starting from day 1.
You have to focus on the fundamental first, like any professional athlete, they practice the basic and fundamentals of the sport they are in.
In FOREX, you need to focus on developing the fundamentals of trading, how it works and how you can take advantage.
But it doesn’t mean it is not worth it, after all, there are many successful Forex Traders who manage to trade for a living. The difference is that they have slowly develop their skills over time and successfully increase their account day by day to a level that can create a sustainable income.
So if you are a beginner, stop worrying about how much money you will earn and instead focus on the process how you can get the amount you need.
If you are STRUGGLING right now and suffering from a consecutive losses or maybe frustrated about your small wins after long hours of battle with the market.
Stop worrying also why until now you can get that amount.. Instead focus on solving the problem why you are not making it. Focus on the answer how you can get the result that you’ve always wanted.
The fact that you are trying to chase for the money, the harder it is to get it.. Change the way you think and focus how will money chase you. Your are not here to just earn a quick buck instead You must want the knowledge how you can make that money for a lifetime.
So, how do I do that, Mike?, you might ask..
Well, you have to start on finding and establishing a Trading System or Process that will give you an edge over your competitor in order for your business to survive and thrive.
You have to focus on establishing your Trading Process that you can follow day in day out. You have to find what will be your trading edge over the market. An edge or system that you will follow as a STANDARD and implement it on your trading journey.
Your Trading System is composed of your Trading process that you need to follow and implement which covers all the aspect of Trading not only entering the market, taking profit.. but the process and system that will give you an edge with regards to Trading Psychology, Money Management and of course your trading method or strategy.
It is hard at first, because you must find an edge or system that will really match your personality. You cannot be a Long-term trader or Swing Trader if you cannot control yourself watching the chart minute after minute which is most likely you are a type of trader who loves the fast pace moved of the market.
And if you are just like me who is an employee when I started trading, I focus on establishing my Trading System around the Daily Price chart because I have a limited time to monitor my trades. I focus on making my system with the end of day trading approach and focus on enhancing it and eventually filter those trading mistakes that I could possibly commit. My trading system are derived opposite from the common strategies most of Failing Traders are using. My trading system follows an unconventional approach.
I failed a lot, and I never forget noting it all down, so I cannot repeat it over time. It is ok to fail, it is the most expensive investment that you can have and you must value it.
I believe that my success right now comes from 80% Failure and mistake and only 20% right most of the time.
(3). Non-Negotiable Patience and Discipline.
You have to be Physically, Mentally and Emotionally Prepare.
There are a lot of emotions involve in trading which really are the reasons why most of beginning traders failed. They are easily get down and emotionally stressed, I been there and done almost everything, I even quit and ditch my trading for a while, it took me about 3 months without trading before a realize something.
In most cases, if you’re expectation fails you, that’s the time where most of emotional feeling becomes involves on the decision making process.
Mindset is critically important as it will drive our Action to get the Result that we wanted.
In trading decisions are crucial to your trading success, your action is based from level of understanding how patience or discipline you are on executing trades and following your system. It is not what you are capable of doing, but what are you willing to sacrifice to get it happen.
The result of it are solely depend on you, everything that you decide comes from your mind. Your progress, and your outcomes is the result of your actions and your actions are based from what your mind decide. And your actions and decisions are always tested by your Patience and how Discipline you are in approaching the constant negative temptation the markets are offering.
Even if you have an almost perfect strategy, but if you failed to master your emotion. There is no meaning! Emotional bias decision making will really hurt your trading performance.
Your emotions and feelings on both wins and losses must be the same. One great way to start is by changing your BELIEFS. Your beliefs create your thoughts…
Your thoughts create your emotions..
Your emotions will then translate into action or inaction.. And your actions are what create results in your trading.
(4). Your Number 1 FOCUS as Forex Trading Beginner is to SURVIVE.
Your “number 1” goal and target as a beginner is to SURVIVE, 2nd goal is to have consistent or steady Returns and your last resort is aiming for “HIGH Return”.
As a beginner, your number one goal and target is to SURVIVE.
Treat trading as if you are lost in an island where no one could help but you. You have no choice but to find ways how you can survive. And the first thing you need is to find food to eat to keep you alive. While you are on the process of hunting for food, chances are you have to consider preserving your energy so you’ll have more power to continue searching for food to eat. Because it doesn’t guarantee that you can immediately find it.
What worst is that, you have to explore first the island before you can even find one, right?
In trading, treat your capital as if it is your energy, that you need to preserve it while you are on the process of exploration and experimentation.
At the early stage of your trading career, it is the time were exploration and experimentation happens in which you apply and test what you have learn so far with real money. It’s also the time that you are starting to build a strong foundation to gain skills and techniques that will give you a consistent return over a long period of time.
You have to preserve your capital as much as possible so you could still have an amount that you can used while hunting for the next opportunity to make profit considering that there is no guaranteed that you will win most of the time.
You have to protect your capital so at the event of a losing streak, you still have the power to survive and be prepare for the next opportunity.
There is really NO POINT on risking all of your capital in a single trade, or even half. One mistake and it can wipe you out.
In the beginning, you have to study and learn how to trade properly and as time goes on you will continue to learn and acquire skills along the way. Which then begin on the process of trial and error learning from your past mistakes then later enhances your skills from a beginner to an intermediate trader. And as an intermediate trader, this is where your level that you can now get a steady returns. You are now skilled enough to thrive. But always remember that in order to thrive in this business, your mindset must be a “CAPITAL PRESERVATION and GROWTH trader”.
(5). Banks Control the FOREX Market
This is not just my personal opinion and experience, this is based from a statistical fact. Below is the snapshot of Market Share by Banks from Wikipedia I believe that this data is from 2016.
It means that the banks rule the Forex Market because they control more than 60-70% of all daily volume in the FX Marketplace. They control the large volume of transaction and consequently they control intra-day trends.
Which only means that most of the time, they know where the most money are sitting, which would only mean that they know also where are most of the traders positions are.
It means that they can move the market price whenever they want, manipulation will be normal. If you haven’t read about the FOREX SCANDAL, here’s another good read from Wikipedia.com, it should be an eye opening to you, if you are serious about thriving in this industry.
https://en.wikipedia.org/wiki/Forex_scandal While this information seems so intriguing and you might not believe in me, sorry buddy but it is the reality. But actually,
We can simply take advantage of this, by understanding how banks are trading and learn to adopt their trading activity. You have to understand the process on how you can trade like them.
And the best way to do that is by not trading against the directions that the banks are going to move the market.
We simply trade opposite of what most of the 95%-99% of failing traders are trading.
So how do I do that?
We have to approach the market and stop using strategies that most of 95%-99% of failing traders are using, because the banks can see that. Big banks knows that most of the traders will definitely buy at the support and sell at the resistance. And most likely they do know also that you put your Stop few pips away from the Support and Resistance. And the strangest thing is that, the moment it hit your stop loss, it immediately returns back to your favor. Sounds familiar? This is one of the reasons why you keep seeing False Break on the market. I know you are familiar with those flash crashes that happens before, the recent one happens during Asian sessions last January 3, 2019 which crashes both Aussie, Yen, Kiwi. Or you might be familiar with EURCHF flash crash! and the Brexit, leaving so many destroyed traders. Hmmmm…. Interesting right??
From the moment I understand this, my mind shifted with the way I approach every trading decisions I made. I understand that my capital is always at risk and there is really a high chance that every single trade I make will lose.
I always expect the un-expected! I now have a different beliefs and view over the market that we cannot continue following the same path and expect different results. And from the moment I started to change my approach which was incorporated on my trading process/system. Profits dramatically pour in. I get consistent and steady returns.
Here’s the thing, Just always remember that in every trading decisions that you make, always know what will be your edge. You cannot beat the Big Banks, just think how you can ride with them.
(6). Investing on Forex Trading Knowledge, Education and Continuous Learnings are Normal if you are a Beginner.
I failed to recognize this in my early trading days, I thought I can do it on my own, I’ve been trying to connect the dots with the hopes of finally discovering a system that could really generate a consistent return after continuously trying it hard.
I spend thousand of hours trial and error, committing mistakes after mistakes.
Without even realizing that those mistakes I commit causes me to suffer bigger losses in an amount that I have never imagine I’ve wasted.
Fees on seminar/courses, books/eBooks and mentors is not an issue for me now, because I VALUE education for as long as it can help me GROW and LEARN MORE.
There’s is no problem on FREE stuffs, but the most valuable lesson that you can get will never be always free. And if you really want to scale your skills, you must accept the fact that you need to spends money on paid course or even mentors.
Because the fastest way to become successful is by modeling other successful trader. Not just copying how do they trade but by understanding the concept how do they trade and learning from their past mistakes.
I never met a successful trader who after consuming several free stuffs becomes literally successful. If there is one, surely, he/she spends also more than the other traders who spends and a lot money for paid courses, books or mentors.
You have to find “players” who wins and emulate what they do”.
I know your are thinking right now, but Mike, I don’t have that much capital to a lot on expensive mentor-ship program. What I have right now is my forex trading capital to really get started.
My best advice is this, Don’t get started yet trading live.. instead invest first your intended capital into learning’s. Learn first before you Earn.
It could literally save you up from committing those costly mistakes.
Don’t get bother on the Price you are Paying, Your Goal is to get as much Value as you can so in return it will help you a lot by the time you started trading live. Treat this as your tuition fee that you pay for you to become a Professional Trader.
If you can’t still afford mentors, there are valuable books, ebooks, paid programs that you can choose and learn from. Just like my EBOOK HERE which is specifically intended to be affordable by those corporate employee, struggling traders and beginning traders who really wants to starting making profit.
I have a reason why I need to charge for it. BUt as I said, don’t get bother on the price, focus on the value that you can get.
Before you even think of entering in the world of Forex Trading , you must do your own due diligence on checking the industry you are in. And just like if you are planning for a business, you have to conduct an Appraisal, Who are the winners in your chosen business sector? Who are the losers? How this industry works? How do I be successful? What mistakes do I need to avoid? What would be my advantage over other competitors? What parameters or tools do I need to operate? I have laid out to you the 6 Forex Trading Facts that you must know before you really decide if the world of trading is really for you.
Do you have something to add? Please feel free to comment it down below.
Have you learn something?? A simple sharing of this post is enough for me to be recognize that at least you have learn something. Thanks,
Until my next post! Cheers,
You are brilliant.Thanks for your Solomonic wisdom.I am declaring you will be a millionaire just like a bamboo tree.
Awesome post! Keep up the great work! 🙂
Great content! Super high-quality! Keep it up! 🙂
Hi mike, how do I get d ebook from Nigeria seeing the amount is in your local currency
hi lucy, what ebook are you referring too..cheers!
your a person that really cares not just inviting people or taking advantage for self interest. keep inspiring future traders. thank you sir mike.