How To Succeed at Forex Trading

[marc walton]

How to Succeed at Forex/Currency Trading: Go to an Auction! below is a brilliant forex article written by one of our senior members, Pierre.

Recently I posted some of Pierre’s results. He has been trading forex for a number of years but since he joined the site pre Christmas time he has started to combine my M2 method with a few “tweaks” of his own and as he says himself, he is now making a very good, full time income solely trading forex.

Pierre next wrote to me at the end of April. He was in second place out of a 1000 entrants in the forex, sure fire trading challenge. Due to a mix up over leverage a lot of the competitors were disqualified, unfortunately including Pierre, he was not a happy bunny.

So now you know a little more about one of our most successful members who has been there & done that, here are some more “pearls of wisdom” that he sent this week.

Currency Trading and Auctions.

Have you ever been to a real auction? Not the ones on the internet but a real one where there are people standing around looking for a good buy. The ones where emotions are involved, the ones where you can buy something way over its market value because the hype and emotions you experience and the atmosphere made you do it?

I did it before!! Not nice at all!! I could have bought my mother in law an aeroplane ticket to come and visit us from the UK!! In her dreams yes!!

Well if you want to succeed at forex trading my advice to you is, attend at least one live auction so that you know what I`m talking about!!

Why Currency trading is like going to an auction.

1) You go there because you want a good buy.
2) So that you can sell it later for a profit.
3) You only have a set amount in your pocket for this auction. (That’s what you think)
4) Before you know it someone is chasing the price up …….but you say stuff you mate…… I want it! Out comes the cheque book!
5) Before you know it you end up with something you bought that is over market value.
6) The dude that chased the price up gets into his BMW with a big smile saying ` ass hole `
7) Its then that you realise, the dude, he is from the bank and he wanted to chase the price up and get you to fall in his trap.

Now you are stuffed with your over priced product for the next couple of months, if your cash position can carry it. (Margin) or you have to learn from it and sell it at a loss.

So what do you learn from your first auction:

1) Go to auctions for a good buy – but be prepared. (Trading plan )
2) Predetermine what you want to buy and what you want to pay for it. Put your offer in at your proffered price like they do at silent auctions. No cheque books please. (Plan the trade)
3) Predetermine your profit, to see if it is worth buying it at your price. (1:2 risk ratio at least )
4) If the auction doesn’t go according to plan, walk away before emotions, hype, atmosphere take over and drop you and make you do something stupid. ( Trade the plan )
5) Identify the dude from the bank, learn his body language, you will soon learn what he wants. Don’t go against him, he will eat you up for breakfast, so eat before you go to the auction. You stand in his shadow and do what he does. (Follow the trend)
6) If you manage to get a nice entry and made a nice profit ……….move on to a new auction with your BMW following the bank manager, but remember it’s a new auction. The rules are the same but the bank manager might represent another bank here so he might be difficult to follow or to see what he wants at this auction!! So stand back and look a bit what’s happening. ( Sit on your hands )
7) If you didn’t manage to get something at the auction – don’t worry – move on to the next auction but remember the rules of engagement!!!!!! ( You didn’t lose money )
One last thing – what auctions do you like? ( Currency ) Don’t go to auctions where you don’t know the rules!!

Good trading new members – I hope this will give you more perspective.

PS. Remember to go to a live auction but don’t take money with you– I will not be held responsible if you do something stupid because I am the bank!!

Regards

Pierre – South Africa

[hazeline03]

For me, the best way in succeeding at forex trading is to find the correct trading methodology. In other words, work off of a successful business plan. The reason new business owners are willing to pay additional dollars for a franchise is because a franchise offers a tried and true business plan.

[julianj]

Today's Guardian newspaper Money Section had a letter about forex trading in the money section. It refers to a previous article about day trading shares.

I couldn't find it online, so I have had to type it out:

As a full-time forex trader I can tell you 95% of part-time retail equity traders fail. They (wannabe equity traders) only ever succeed tempoarily in a bull market or secular bear market, and can only play the second if the bust after the first phenomenon still leaves them with enough capital to stay in the game. It is the hardest method to make easy money you could imagine.

I've never come across a part-time trader (forex or equities) who started off as a hobby and suddenly moved into full-time them bought the mock-tudor starter mansion, the Lambo, and the 55ft Azimut.

If it happens, it's one in a million.

burntfaceman


Any comments?

Julian

[marc walton]

Hi Julian, Its in the Guardian so it must be true

Yes forex is hard and it is and it takes a certain kind of personality to stick with it, but i know lots of people who are making good money currency trading. When you see the figure of 95% of people fail at forex, how many people fail at their 1st business?

This is a business.

I remember a similar failure rate many years ago was english people who were buying bars in Spain. Why was the failure rate so high?

Many had never run a business in their own country, Didnt speak spanish, were too fond of the product! and didnt realise how many hours a week the few successful people put in.

There are similarities with forex. The reason why the failure rate is high is that most people who come to forex are attracted by the "get rich quick" mentality.

Many are entrepreneurial by nature and as a result are not good at following orders/rules.

As you now know the self discipline that is required to succeed is phenomenal (I still struggle with it every single day).

Also many new arrivals have maybe a few $1000 they can spare and start trading sometimes within days & yet they have no idea what they are doing. They don't understand what is going on and have no real plan of action.

They are up against some of the smartest brains on the planet and yet continue to "bet" until their account is blown.

I am not criticising here; I have been there & got the T shirt. I blew two accounts before I stopped and finally realised that it was the lack of discipline that was killing me. I had spent a fortune at that point on courses, videos, e books etc + my losses totalled somewhere in the region of $20.000. I had also spent a few THOUSAND hours staring at charts.

I still KNEW there was money to be made & If I had not been able to succeed at forex I may well have had to uproot my family & go back to live in the UK, so maybe I had a bigger incentive than most people

You have taken a step in the right direction with the mentoring and are obviously willing to put the hours in, BUT it took me 3 years before I became successful and that was after I had taken a few months vacation from the damn thing

If you were re-training for a career that has the potential to earn you $100.000 a year (lets say a surgeon for example) would you expect to be let loose on a heart transplant by the second week? Of course not, BUT I never cease to be amazed how many new people are trading real money within a matter of days.

That is simply gambling not trading, they may as well go bet on a horse.

Now they have blown their account, their next port of call is a forum where they start blaming the broker or anyone else they can think of.

Another thing is that it is important that you surround yourself with positive, successful people whether its forex or any other venture. I told you before that I am not a fan of chat rooms etc as all it takes is one negative comment or person and all your own doubts pour to the surface.

Forex trading is not easy and as i explained in my e book to succeed you have to be willing to persevere against at what at times appear to be impossible odds & many set backs. Many people simply do not have the mind set or perseverance needed to succeed at any type of business.

One final thing to bear in mind is that forex is not suitable for everyone: Some people simply can't succeed at it, but that is the same in any profession. Some people are not cut out to be a carpenter or a banker etc. Its not that the profession is wrong its simply that it is not for them.

I have testimonials from literally 100's of people who now tell me they are making either a good second or full time income at forex. Not everybody wants to give up their main job. Some treat & enjoy the intellectual challenge of forex as a hobby. Others are still at the stage where it is driving them nuts (Years 2 & 3 for me). Forex is addictive & can damage your health & wealth if you do not learn to control your emotions.

There, got that off my chest! I firmly believe that anyone can succeed at most things if they have a burning desire & set their mind to it and give it the 100% attention it requires as per the Napoleon Hill book I gave away the other week "Think & Grow Rich".

best of luck with your forex trading, marc

[raa]

Thank you very much, Marc, for sharing your private moments and giving us a hope! We are truly blessed!

[julianj]

Thanks Marc.

I appreciate your full reply. I am now going to go and worship my pile of old Guardians.

Cheers

Julian