By: Terry Allen
Are you still experiencing problems making consistent Forex profits? If so, then do not become too depressed because there are many others in the same boat. Why are so many people having so much difficulty? After all, expert consensus states that a person of reasonable intelligence can gain a good understanding of Forex well within six months.
However, another sad statistic emphasizes that nearly 95% of all traders never progress past their first full year of trading. Many fail much earlier than that.
You probably found that you could interpret all the trading rules and analyze technical charts very quickly. How long did it take you to open your first trade? You most likely achieve this feat within a week or so. If you can make such quick progress, then what is going wrong?
Many experts again explain that novices have a tendency to focus on the mechanical features of trading such as opening and closing new trades. Of course, these functions are very important, but pale into insignificance compared to other vital activities. These include focusing your attention on your mindset and your psychological approach to trading.
How can such abstract concepts have any bearing on your trading? Well, let us have a look. If you act in the same way as most novices, then you will be very keen to acquire a slice of the massive daily Forex turnover that is reputed to be in the region of three billion.
You may also believe that you can only do this by activating many new trades. From your internet investigations, you have no doubt become familiar with topics such as money management, fundamental analysis, technical analysis and trading strategies, etc.
You would think that after grasping all this information and creating a plan based on it that you should be ready to make a killing. However, why are you not doing so and why are you still raking up such large losses? The reason for this is that your own mindset is working against you.
This is because you are trying to snatch at profits by opening trades with the hope that they will proceed in your chosen direction. In addition, you are probably activating numerous trades over short periods of time in order to experience some sense of accomplishment.
Consequently, you may well find that you are suffering from serious levels of mental stress, which can have the effect of compounding all your problems.
You have probably watched price first move against your new trades, stopping you out before reversing back towards your chosen direction. Alternatively, you may have become demoralized by observing initial early profits vanish in a puff of smoke. If so, then you are trading impatiently and in a mental state of significant anguish.
You can overcome these problems by developing a trading style that allows your open positions to achieve their full potential. You can do this by ensuring your risk levels will prevent you from ever over-trading and using technical indicators of the highest quality.