If you ever invested in any other market, such as equities, you know that the first thing to consider before placing any trade, is the risk/reward ratio. If the reward is not enough to make the risk worthwhile, don’t take it. On the other hand, risk provides the opportunity to make more money. If you know how to take calculated risks, you will see a profit. But here again, if you don’t know much about Forex, you will not know what a calculated risk is and won’t see the opportunity when it arises.
International Forex markets trade over $4 trillion on a daily basis. But 90% of Forex traders lose money within weeks of placing a trade. So how do the other 10% make it big? What do they know about Forex trading that takes them over the top?
The first thing to remember is everyone can become a successful trader. It take time, experience and a lot of education. Every trader should sign up for an online tutorial of some sort before opening a trading account. Most Forex brokers offer instructional courses on their website and this is good to get you started. There are also independent free courses such as Learn FX Live offered by Hector which provide the future trader with all the basics and advanced tools for turning a profit.
Education is key to knowing how to make money. In 1983, millionaire Richard Dennis proved that anyone can be taught to trade successfully. He took a group of people of all walks of life, ages and intelligence and called them the Turtle Traders. He spent two full weeks teaching them all they needed to know about Forex and how to gain confidence in trading. At the end of the course, he opened up an account for each and gave them $250,000 to trade. Five years later, the group together had amassed well over $100million and some of the Turtles went on to become well known financial professionals.
Dennis’s experiment proved that with enough education, the average person can gain the confidence and courage to take the risks at the correct time. He believed that it is all in the mind and that you can teach your mind how to think and feel. By using a simple trading method, anyone can trade profitably.
Focus on the risk involved, jump at the opportunity when it presents itself and don’t pull out too early. Never let your emotions get in the way and accept the losses along with the wins. It’s all part of the game.