The
Paradox of the Successful
Currency Trader
Consider the following two seemingly irresolvable paradoxes.
Paradox 1:
Put two novice traders in front of a high probability trade set up at
any given moment in time for a particular currency pair and give them
each a tried and tested Forex strategy to work with. Put each
of
them on opposite sides of the trade - one will buy the currency and one
will sell. What is the likely result?
Easy! One will
win and one will lose, right?
WRONG. More often then not,
they will both end up
losing money on the trade.
Yes, if we added their
statistically expected payoffs from such trade, it will invariably be
negative - They
will, on average,
BOTH lose money.
In contrast, put two SUCCESSFUL Forex traders in front of a high
probability trade set up at any given moment in time for a particular
currency pair and give them each a tried and tested Forex strategy to
work with. Insist that each of them must take opposite sides
of a
trade - one will buy the currency and the other will sell.
What
is the likely result? One will win and one will lose,
right?
WRONG AGAIN. More
often then not, they will BOTH end up making money on the trade.
Again, if we added their statistically expected payoffs from such a
trade, it will invariably be positive - They will on average, BOTH
make money.
Confused? Confounded? Downright Angry?
Read on!
Paradox 2:
Many
SUCCESSFUL Forex Traders
have a win ratio of less than 50%.
This means that on
average, they are more often wrong than right in their trade
decisions. For instance, there are many successful
forex traders with a win ratio of less than 40%.
Yes, a
Forex trader who has a win rate of say, 38% can easily be consistently
successful in trading currencies profitably. They will be
right
in their trade decisions 38% of the time and wrong 62% of the time and
still consistently make money trading currencies.
Bullshit, you say? Impossible, you believe?
Do these paradoxes confound you? Again, is there some secret
that
successful currency traders know that allows them to succeed despite
the odds. Is there some magical
formula that allows these
elite
traders to overcome all of the odds to be consistently successful at
trading the Forex?
Yes,
there is a "formula" or
"technique".
These traders are doing something very different from 95% of the
unsuccessful forex traders out there.
The
"Secret" so
Cleverly Hidden in Plain View
The Secret to trading currencies successfully is something you already
know and have heard
about. It has been written
about many
times. There are
books written about it and videos explain
how
this secret works. All Forex courses teach it. All
Forex
schools have this in their curriculum. There is even software
available to implement this secret.
The experts flat out tell you how important this "secret" is.
They even go so far as to point it out to you. Yes, they tell
you, "here
is the secret to trading
currencies . . . " and lay it
out
on the table for you.
Yet for most of us, we still don't manage to see it. It is
directly in front of us in plain view, but we are unable to grasp the
secret. Even though
we are told what it is, we don't
appreciate
its significance. Not until we have fallen flat on our face
many
times and lost a lot of money do we perhaps begin to get an inkling
about what the secret is all about.
Ok,
Enough with the Cryptic
Language, What is the SECRET? TELL
ME! TELL ME NOW!!!
Without a doubt, the single most important element to successfully
trading Forex is . . .
FOREX MONEY MANAGEMENT
Disappointed? Expecting something more mystical or
elaborate? Something more grandious? Sorry to burst
your
bubble.
The secret to Forex trading is to implement a sound Forex money
management program!
That combined with a reasonable
trading
system and sound trader
psychology is all you need to
succeed.
Don’t forget
to
register
for all of our free Articles, Videos and Tutorials available in our
members area as
well.
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