If you think about it around 95% of traders lose all their equity and lose money and only around 5% make big gains.
The losing majority follow 4 accepted wisdoms in their forex education and if you fall into the same trap you will lose to, so let’s look at them.
1. An expert knows best
This is partly true, but the experts in forex trading who make the big gains certainly won’t tell you how they do it – there to busy making money, to bother selling their secrets.
The ”experts” that sell currency e-books for $100 or so, are certainly experts, but at marketing.
Doesn’t’ that copy look appealing?
Follow them and make money automatically, every month and all backed up by a simulated hypothetical track record done knowing the closing prices.
Most of them are junk and you can get better information for free on the net.
To make money you need to do it yourself and forget about anyone else helping you learn forex trading information that will make you a fortune.
2. You can predict market behavior
Another accepted wisdom that is dead wrong is – you can predict the market with scientific theory as prices move to a natural law.
Let’s hear it for investment theories such as Elliot Wave.
Elliot wave says markets move to scientific patterns but of course can’t tell you what they are!
If any theory could of course predict market behavior in advance there would be no market as we would all know the price.
3. More is better
Lots of clever people trade currencies and they have complicated forex trading strategies, using neural networks, artificial intelligence and chaos theory, bad news is they don’t work.
There is no correlation between how hard you work at forex trading and how much money you make, just as there is no correlation between how complicated a system is and how much money it makes.
Currency trading success is all about learning the right information ( and this means working smart rather than hard) and simple systems beat complicated systems, as they are more robust.
So all those people who tell you that you have to work hard and be clever are wrong – you need to work smart and keep it simple.
4. Above all else protect a profit
Forex trading is risky and if you don’t take meaningful risks you wont make a lot of money.
Most traders however try and protect profits and limit losses so much they are guaranteed to lose.
Here is what they do:
1. Diversify – Another word for this is dilute profits
2. Day trade – the best way to lose money – it doesn’t work
3. Trail stops quickly to lock in profit – translated as get minor profit when you could have made a large one.
4. Risk 2% per trade – Well if you don’t risk a lot you won’t make much either!
All the above are accepted wisdoms of online currency trading and all will prevent you from making forex profits.
If you understand the above and try a different type of forex education - that teaches you how to learn forex trading a different way, which is not accepted by the majority and you could join the elite 5% who make big gains trading Forex markets.
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