Photo credits: Better Place
Anyone interested in technology, the environment or the automotive industry has certainly heard about Better Place, an innovative Israeli company whose aim was to popularize electric cars that are not reliant on traditional fuel, a commodity whose price has continued to rise in recent years, plaguing consumers, especially those facing financial struggles during the downturns in both America and Europe. In only 6 short years, Better Place created a model of a fully battery-operated Renault car, rolled out charging stations throughout Israel and Denmark, and put forth its idea that cars could run electrically rather that being dependent on crude oil prices and other factors that influence the price of gas. Despite the hype and efforts invested into marketing the benefits of this unique transportation model, Better Place cars never took off, and today plans to dissolve the company have been announced. Perhaps it was the small sample size of the countries selected for the pilot, or the scalability of the model and the inability to execute it on a large scale, which made it nearly impossible for Better Place to begin in a larger market.
And yet, there are certainly lessons that can and should be learned from this expensive endeavor – lessons that shouldn't go unnoticed or ignored by Forex traders (or entrepreneurs) at any level.
1-Even professionals make mistakes. In 2003, before founding Better Place, founder and original CEO Shai Agassi was named by CNN-Time Magazine as one of the top 20 "?Global Influentials," and founded several successful technology companies which were later acquired for hundreds of millions of dollars. And yet, despite his past success and his immense knowledge of how to build and run a successful technology company, Agassi was not successful in his role at Better Place. When it comes to Forex trading, the same is true. Even professionals are vulnerable to failure. This lesson is extremely important for traders who are looking to trading gurus, experts and signals providers in order to find profits in the Forex market. It must be understood that while others may know more than you, there is no guarantee that they will always be profitable, and following professionals blindly is not a recommended Forex strategy.
2-Past success doesn't always indicate future success. Just as no two companies can be run in exactly the same way, no two trades can be exactly the same. Past successful trades may indicate potential for profit, but can't be taken as a definite. Traders must look at every trade as its own entity and to consider every possible angle before committing to any trade – and even then, be prepared that it may not go entirely smoothly.
3-What goes up must come down. There is no better example of this mantra than the cost of gold, which has risen steeply in recent years, and subsequently crashed hard. Likewise, Better Place started with a lot of funding and a lot of buzz, both of which died down as the company began to fizzle out. Some traders correctly predicted the fall of gold, much like many analysts could foresee the struggles of Better Place. But the majority of spectators and analysts in both cases preferred to remain optimistic and to follow the glory rather than the trends. And this type of market blindness is dangerous both for traders and for entrepreneurs of all types.
4-Sometimes it's ok to cut your losses. It has been reported that all told, Better Place lost somewhere near $812 million. The company is now being forced to cut its losses and perhaps even to file for bankruptcy, as its total holdings have dwindled to somewhere near $30 million. When it comes to Forex trading, traders must also know when to cut their losses. There are times that even a potentially promising trade results in a loss, and times when it's better to implement a stop loss than to wipe out completely. This action isn't a sign of weakness, but one of strength, and for some traders (and entrepreneurs), it may be the one thing that keeps you going.
5-When the going gets tough, the tough get going. Sure, it sounds cliché, but nothing can be further from the truth. How many of the world's truly triumphant CEOs faced failure before they found success? How many Forex traders completely wiped out before they realized that they must trade with a strategy rather than a gut feeling? There's always room to throw in the towel, but the truly influential and inspirational people in any field are those who stand up to adversity and show that failure is simply part of the path to success.
What's the biggest Forex lesson you've learned from another trader or company?