Forex Trading - the Key to Huge Profits is
Fact: Most traders don't have the mental discipline to make big gains. This may sound odd we all want them don't we?
Of course, but most traders don't have the mental discipline to hold them they bank them early or get stopped out. Let's look at why and how to hold and bank the big moves.
Why most traders cannot maintain discipline.
The reason lies in human nature. We all hate to be wrong and when we have a small loss we let it get bigger (after all it will turn around soon) so a small loss becomes a big loss - then it's too big to take and the trader hangs on until he is wiped out.
Traders have problems with losses, but they also don't have the discipline to make profits!
If this sounds odd (after all we all want forex profits) on reflection it's not.
When a trader has a profit he gets excited and the bigger the profit becomes the more the temptation is there to take it before it gets way.
As normal market action eats into open equity, the greater the temptation becomes to take it, after all no one goes broke taking a profit?
YES they do!
If you don't have the discipline to run the big profits, you will ever cover your inevitable loses.
The way to get disciplined in simple steps is.
1. Understand what you are doing
If you follow anything you don't understand you will lack discipline and this is what many traders do.
They follow gurus or systems they don't understand the logic of and of course wilt and throw in the towel when losses occur.
Understanding is the key to:
2. Confidence
If you don't understand you won't be confident to follow your system through the bad times. You will over ride it or bin it and frankly you may as well not have a system at all
3. The key
Here is the equation for success
Understanding = Confidence = Discipline
Let's look at this in a bit more detail.
1. On your method make sure its simple and you understand why it works long term and think of losses as just a normal cost of doing business. Don't ever follow a system blindly.
2. Make sure you place your stop as soon as you open a trade
3. Understand that the big profits in forex trading are made following the long term trends - and these last months or years and can be worth 10, 20, 30,000 or more!
4. To hold these trends you must learn to take pullbacks in open equity. This is hard when you lose a 1,000 in a day or more but keep your eye on the bigger picture - Don't move stops to soon, you will get taken out by market noise
5. To win you have to have the discipline to cut losses, but you also have to have the mental discipline to accept big profits.
If you think about the above it's logical, but is very hard to achieve in practice when money is on the line emotions kick in even with experienced traders, but if you understand the above you can stay disciplined and if you do you can achieve some huge forex profits.
Related Tags: forex trading, currency trading success, forex education, forex trading adviceforex profits
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