Hello readers, If it is your first time coming to this blog, you are welcome.To my regular readers,welcome back. Today I am going to talk about the success rate in Forex trading and also about the challenges that many traders face (challenges that I also faced and managed to deal with successfully). The statistics about the success rate in Forex trading are shocking. Last week I was just minding my own business and a good friend of mine dropped an image via FB messenger showing the statistics of survival rate in Forex trading. He came to my inbox and wrote a message in all caps that read ” I THINK IT’S HIGH TIME YOU COMPILE A BOOK ABOUT FOREX”. OK he did not even greet or anything but I understood that he just wanted to cough it out. I am not sure If those statistics are accurate but they seem to be what I have seen and witnessed before. Let me break this down for you. The statistics were in this sequence.
- All traders start with a dream to get rich quick
- 40% trade only for a month
- 80% quit within the first 2 years
- Only 7% remain after 5 years
All Traders Start With a Dream To Get Rich Quick
I was once one of the people who came to Forex trading carrying a huge dream, not only a huge one but a very very unrealistic dream. It all started with following on Forex trading groups/forums. Maybe you are reading here and you are one of the people who likes every page that has Forex word in it and joining every Forex group on social media (mainly Facebook, it seems to be flooded with Forex groups). You know that when you are still trying to do your research, it is very rare to come across realistic information (congratulations for finding this blog). Your next step is likely to book yourself for every Forex trading seminars in every town (that is where I started back in 2009). My dream to be a millionaire was soon shattered when I realized that everything that I read about or was told about on seminars was not even close to what I was witnessing. The thing is no one is really telling it as it is in those seminars. The only thing that they are doing is to get you hyped up and pumped up with visual riches. I personally lost lots of money paying for the information that never helped or assisted me in anyway. I am here today writing this blog post simply because I dint t give up.
40% Trade Only For a Month
Now this group right here usually drop everything to pursue the trading career. They resign from work and take all their savings (which is something I do not encourage), they drop out of school and start preaching the ” self education will make your a fortune” verse, we all know this bunch who criticize academics and only want to be street smart. This is the same bunch who think I am crazy when I encourage my Forex mentees to be productive and not rely on an investment( Forex trading) only. Every smart person knows that relying on one source of income is never a good idea. They are mostly pushed and are inspired by every guy who drives a faster or a bigger car but never reveal to other people that he owns other businesses as well and that it is impossible to make a million when your investment is only $50 ( I am being realistic). You are probably sending an email to me right now asking about how much can you start with. Read this post Here, it has all your answers.
This bunch do not talk about anything else but Forex trading and how they are going to make it and become millionaires. They are also huge fans of seminars and they eventually find someone to teach them and they start trading. To their surprise, they just don’t make even 1% of their account on a monthly basis. They are simply gambling with their money no matter how great their mentor can be, these guys are looking for big money. Anything that is below 50% per month is nothing to them, they want to make 50% on a daily basis and they risk loosing all their money in the process. They fail to understand that Forex trading is the only legit investment that can yield even 5% per month and no other investment can do such.
These guys become slaves to a broker. They work hard and keep on adding money to their account without actually trying to figure out what is it that they are doing wrong that causes the losses (they don’t have time to do that, their thinking is clouded and they are uncoachable). When they make profit, they make a lot but when they take a loss, they go straight to a margin call and they specialize in blowing accounts because everyone is normalizing it, everyone says a trader has to blow accounts before they get to be masters. Maybe there is some truth in that, judging by the fact that ahem! yours truly was a queen of blowing accounts (smiles as I write this, just got reminded of old times). These guys never take money home (withdraw from trading account). If they do withdraw, they blow everything that was left and go back to their bank account to fund their Forex account again (and they never tell). These are the guys who last only for a month or so. Then they go around telling everyone how they’ve tried and failed, how Forex never works and they are the same guys who are likely to open a Forex academy in the near future or shortly after their failure (making money solely from classes while teaching the same method that they used and failed, they have no experience or whatsoever to be coaching the next person). This has been a huge problem in this industry as everyone wants to open an academy after trading for a month or so. We see Forex gurus popping up week after week. I hope I won’t be attacked for this truth (saying a prayer for protection). Some of them become gurus of schemes shortly after they messed up.
80% Quit within 2 years
I almost fell in this category. After trying so much I came to a point where every guru I paid never even tried to reach out to me or even try to assist. I moved from one Forex guru to another and they all spoke to me prior to making payments and soon after that they got so busy to even reply to my emails, whatsApp messages or FB. Some of them even blocked me a few days after I paid them (tough times) and that is one thing that turned me off from FB Forex groups (but I am sure there are good ones out there). What helped me though was the fact that I decided to give this my all and dug as much as I could. So this girl right here came a long way and she is still going far. So if you are on the verge of quitting, try to revisit your steps up to now and see if you can try what I did. Remove all the clutter to clear your mind. Leave those groups if they make you feel like they made me feel. Restart with a sober mind and see if it will work, it worked for me.
Only 7% Remain After 5 Years
Now this is talking about me and that other person who remained. We remained because we refused to be ruled by emotions and we worked harder than most (on our emotions). Now let me tell you about why I remained. I remained because I started to set realistic goals for my self. I started to focus on one method of trading while I worked so hard to improve my craft up to a point of mastering it. I managed because I started to keep a trading journal which I wrote all different scenarios as they were unfolding on my trading and therefore learning to do better month after month (I still have that journal and is it forever updated, last update was last Friday the 3rd). I separated myself from the crowd (Forex forums) and started to look back at all my trading activities of the past year. I made a decision to stop being a jack of all methods and a master of none. It was too hard to even login to my trading account and to see those loses. For me to remain in the markets for the next 10 years and even more, I have to remain grounded as I am and focus my mind to reaching my goals. I have grown and I no longer look for daily, weekly or even monthly returns (even though I set them) this year I will not be measuring my progress by what I can make on a monthly basis. I am now gunning for the yearly returns. I have learned that if you trade without setting daily limits, you are just like a driver who drives around with a map but no destination. Experience has taught me that setting monthly, weekly and down to daily targets is not necessarily limiting myself. It is also the most effective way to teach yourself discipline and learning to trade, bank and walk away as soon as your daily target is reached and be productive somewhere else (which is the main reason why my last margin call was in 2012). If you have no idea where to start with setting your own targets, you might find this post HERE handy. and set up your own as long as they are realistic enough.
Note To a Newbie
Know what you want, if it is to invest and grow your money month after month while keeping your risks low, invest more in yourself and note that a master is not the one who wants to know all these trading methods. If you are lucky enough to find a mentor who is willing to hold you by hand, avail yourself to be mentored and watch your account growing from strength to strength, that’s the whole idea of having a trading account (to be able to grow your money month after month even if it means by only 2%). Trading is also a great way to test your strengths and your weaknesses and it teaches you a lot about yourself as a person and how to handle glitches in all areas of your life. Understand that it takes time to make consistent profits month after month. Work on yourself first and profits will soon build up. If you can learn to master your emotions and protecting your equity, you have won half the battle.
This is one thing that separates winners from losers. I struggle a lot with my mentees as well. Those who make it are those who know how to control themselves and the unfortunate part is that I cannot teach them, but I can only assist if they are also doing their part (which is not always the case). Start with smaller volumes no matter how big your equity is (watch everyone laughing at you for trading smaller lot size), you do that to make sure that you create enough room for mistakes. If you trade higher lot size like someone who is way more experienced than you, you are likely to loose all your money because you are still new, you get nervous and make more mistakes than someone who has experience. Thank you for stopping by and reading this post I hope you learned something that you can use. Kindly share with your peers using the share buttons below if you find this information valuable, let this information reach as many people as it can.
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