‘Forex Trading is easy’, so the many websites would have us believe, but if it was, wouldn’t we all be millionaires?
As with everything new in life, we need to learn how to do it and do it properly. Today’s budding Forex traders are lucky enough to have a wealth of training available on the internet to help them learn how to use technical indicators, automated trading systems and the myriad other tools on offer.
With careful preparation and the right tools; a trading strategy that keeps emotion at arm’s length and the use of a good risk/reward principle, we are told that we should find ourselves in profit at the end of a series of trades. So why does it go wrong so often for some people?
There are many answers to this question but one of the main ones is that novice traders often develop a ‘know-it-all’ attitude after an early success or two whilst the experienced trader is still likely to seek, consider and heed advice when they need it or hear it.
It’s a gender issue too and can be linked to the male trait of never admitting they’re wrong. How many times have we seen a couple driving around in circles because the man refuses to admit he’s lost and won’t look at the map, despite protestations from his partner? He’d rather carry on, hoping he’ll find the right route rather than do the sensible thing and stop to seek advice from the map.
We see the same scenario in Forex trading, especially now social media has brought traders closer together. A text, a tweet or a trading signal sent through, could contain good advice, maybe on how to make a profit, maybe news that will mean the trader gets out before incurring a loss, but to have an effect, that advice has got to be weighed up and acted upon.
The worst enemy of advice taking is ego. Many traders who have been successful, even if only for a short period, develop an aura of invincibility, their guard slips and they refuse to believe they could be wrong. This is a sure-fire recipe for disaster. Yes, the experienced trader who has developed that working sixth sense may have good reason to ignore a signal but until you’ve reached that trading nirvana, advice should certainly be considered carefully but then so should the source. There’s an old proverb which rings true, even to this day; Advice is a thing that is freely given but watch that you only take what’s worth having.
To improve your chances of success, take advice only from trusted sources, do a bit of research into how successful they’ve been following their own advice, look to see whether other indicators support their views and finally decide whether you can afford to take their advice.
Guest post by Razi Hammouda of FXLords
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