Why You’ll Never Make Money in Forex
When you want to succeed as bad as you want to breathe, you’ll be successful. Much like in life, you won’t get far in trading Forex when you don’t have the right mindset coming in.
You’ve done your backtesting, you’ve made sure you’ve got the best strategy, you’ve followed the best coaches, yet you still end up empty handed? It left you asking, what was I doing wrong? I thought there was lots of money in Forex?
More than the right tools and the right strategy, your trading success depends on you- yourself alone. Why is that? I hear you cry! Well, let me share a story to give you a better picture.
The story of Poor John
Some moons ago, there was an aspiring trader, named John. He worked in a 9-5 job as an accountant. Tired of his routine, John often found himself slacking off during office hours. One day, he saw his classmate on Facebook bragging about how amazing his recent trip to the Caribbean was. Envious, he digs deeper.
He went on to find his friend’s profile, only to see pictures after pictures of how awesome his life has turned out. This made him question himself: why is he more successful when I was a better student growing up?
John wondered what his friend’s secret was. He asked around and he finally got his answer. His friend is trading the Forex Market! And so this crazy idea came upon him. He thought, “I can do that too”! I can also leave my boring job, become a trader, and finally do what I wanted in life! Money is in Forex!
Not long after, John left his job with his dreams of becoming a full-time Forex trader. He was picturing himself trading while sitting on a beach bed in an idyllic paradise somewhere. “It is going to be awesome”, he gasped!
John did light research about the matter and quickly learned the basics. He started with the minimum deposit and was now earning penny after penny. But to John, it was not enough. There was a voice in his mind that kept saying, “I didn’t leave my job for a few hundred dollars each month”! ‘I want the real Forex money’. So he had to take actions…
After months of reading, backtesting, and trading, John reckoned that the day has come! He had finally formed a strategy! His dreams of sipping piña colada while trading on his phone under the blazing Maldives sun is finally coming true!
Everything went well at the beginning for John. His earnings grew from a few dollars to a few hundred dollars each week. John was in cloud-nine! He’s done it!
But little did poor John know something terrible is along the way….
A few weeks had passed, and the tides have turned. John was accumulating losses after losses. Quick to his feet, John tweaked his strategy, and that thankfully saved him. After a couple of days, though, something wasn’t right again, and so John decided to make a few more adjustments. Some work, most failed. This went on. Tweak after tweak, John has gradually lost faith in his strategy and on himself. He decided to move on and start from scratch, only to be on the same spot months after. He’s fallen in the Cycle of Doom!
What has John done wrong?
John has fallen to what many of us call, the “Cycle of Doom”. He chose and developed a strategy; tweaked it when things didn’t go as planned; suffered losses; tweaked it again, and then dumped it when he completely lost trust on the strategy.
This folks, is not how you do it. If something doesn’t work, fret not, as you’ll be presented with many chances to get back up. Always backtest your strategy, so you’ll anticipate how things may go in the future. Furthermore, have faith in your strategy. Don’t let allow yourself to be too caught up with your emotions, as this does more damage than good.
Another thing that John got wrong when he went in, was his mindset. He believed the marketing stunt many educators have promised: trade while on the beach; copy someone’s trade without ever knowing anything, and become rich in just a $100, and so forth! He thought it was easy-peasy! (Disclaimer: I’m not saying that all of these are wrong, but getting there won’t be an easy walk in the park. It will take time.)
John represents the many aspiring traders of today. Many of us came here thinking that Forex money is a quick-rich scheme. Many thought it was easy. Well, I hate to break it to you, but it doesn’t work like that. Trading the Forex Market requires hard work, a whole lot of grit, and a ton of patience.
Now that you know what led to John’s demise, I hope you’ll take the moral of our today’s blog and apply it on your daily life as a trader. Let me know what your thoughts are. Do you know some Johns in your life? Have you been in a similar situation? What have you done to get through it? I would love to hear your stories!
And so I close this with a warning: don’t be like Poor John.