Why Expectationditis Can Drop Kick Your Forex Future.
When trading Forex markets, there are many things to think about. However, one of the most important parts of becoming a successful Forex trader is the simple discussion of expectations. Unfortunately, there are a lot of people out there that are willing to sell you systems, dreams, and other such shenanigans about the currency markets and the available returns.
If you asked yourself what kind of return you expected, this could be very telling. There are a lot of people out there that claim the Forex markets can give hundreds of percent returns every year. While this is theoretically possible, you have to keep in mind that some of the best Forex traders in the world are making 30% a year. Those people are very rare, and they are professionals with millions of dollars behind them most of the time.
What we find amazing is that there are plenty of new Forex traders out there who will admit that if a money manager made 30% a year in their 401(k) plan, they would be ecstatic. However, they believe that they should somehow be better than these professionals. They set themselves up for failure because of this, as they do not allow themselves the same kind of grace that the professionals get from them.
On top of that, you have to keep in mind that not every trade is going to be a winner . With that in mind, you have to allow yourself to take a loss. When you have a retirement plan, you don't worry about every trade that the manager takes. You just want the manager to make a profit in the end. Your trading should be any different. However, most traders do not give themselves the luxury of being human. Unfortunately, this leads to unrealistic expectations, which leads to self-inflicted punishment every time they lose a little bit of money.
Every time you trade, there is a risk that you're going to lose money . That's just a simple statement of fact, you have to understand that you need to look at the overall return of the markets, and that profit is profit. However, do not get sold into the idea that you're going to need to make 1000% a year in order to make Forex enjoyable or even worthwhile. You need to look into with some of the masters of the markets make in order to understand what a truly good trader does. While this isn't meant to discourage you, it does help you begin to think about realistic expectations. One of the most dangerous things about the markets when it comes to trading currencies is that there are a lot of people out there trying to turn $500 into $1 million.