Why most people lose money in the forex market
In the forex market, sometimes you get the fruit. Sometimes you get trapped and shot. Why?
Woodchucks want to learn the market.They want to know what signals are most predictive. They want to know everything they can not only about spot trading, but about their broker, their broker’s practices,the governments involved in currency movement, interest rate changes, and the list goes on and on. Woodchucks want to know as much as they can. It might destroy the mystery, but they’re not in the forex market for adventure. They’re in it for profit. There is a myth in American culture, and it’s spreading around the world: your job should be fun. You should enjoy what you do for a living. “Do what you love and the money will follow.” And so on. Perhaps we’ve had too strong of a dose of this doctrine. The truth is that although we are better off choosing a career that interests us,we’re going to be bored at work if we learn our job really well. The promise is simple: if you become a world-class forex trader, at some point your job will be ho-hum. Not all the time, but it’s not going to be an adventure every day of the week. Sorry.On the other hand, consider that successful forex traders are some of the most highly paid professionals in the world. If you pay them by the hour, they make thousands and thousands of dollars for every 60 minute period they spend working. Some of them only trade for a half day. Some trade for 20 hours a day.Their jobs aren’t always fun, but they do make a lot of money. Why be a Woodchuck? Simply put, if you want to survive, then you need to start thinking like a Woodchuck. If you want to make money, you need to commit yourself to freeing yourself from the trap and getting the fruit. Or, more importantly, finding a way to eat the fruit without ever entering the trap in the first place. And therein lies the secret. We’re all going to get trapped from time to time, but we have a choice of whether to free ourselves or lay down and let the trapper shoot us. I learned my lesson early in my career as a forex trader. Although I had spent four months creating a trading strategy and system, I occasionally really, really wanted the fruit, so to speak. At those times, when I should have stayed on the sidelines of the market, I would enter trades based on rumor, speculation, or even well-informed opinions – instead of my tried and tested strategy. In other words, I would enter the trap and start eating the fruit, thinking that I could get out of the trap without setting it off.