A recent survey showed the average length of time most folks practice or train to become a forex trader is 6 months or less. This is not surprising given the statistic that over 80% blow out their trading accounts within the first year.
The key point here is that if you plan to start trading real money with little to no training in your first year, your chances of succeeding are slim to none.
It is virtually impossible to gain all the necessary experience needed to understand the various conditions in the market on a day to day basis in under 12 months.
In any other professional endeavor, the idea of being competent enough in such a short time to perform and achieve a consistent level of success would be unthinkable. So why do so many forex traders (over 80%) expect immediate success?
The answer is simple. They listen to a forex broker. They are led to believe that with a couple of weeks of experience and unlimited access to free training - indicators, trading systems, and so on - success is right around the corner.
If it was really that simple, wouldn't everyone be doing it?
So why not do what the successful 15-20% are doing? Get professional training.
When you go to a casino, they are more than willing to teach you for free how to gamble. Why? Because they want your money in their pocket as quickly as possible. Have you heard the old saying, "brokers just make you broker"?
Giving yourself ample time to be correctly trained and being cautious where you get your trading advice from are timeless truisms.
I recommend approaching forex trading just as you would starting a small part-time business. Set small realistic goals. What is so wrong with this concept? After 6 months of training, you start achieving $200 - $300 additional income by trading a few hours every week.
Six months later, you simply add an additional lot to your trade and keep doing all the same things. You have developed the correct mindset and habits, and with the same effort, you are now adding an additional $400 - $600 to your income every week.
Why is it that we feel we have to go from zero to six figures in one quantum leap? Why is it that we do not realize when we expect quantum success, we are also courting quantum failure? More importantly, the statistics show quantum failure is the most probable outcome.
Years ago, the mindset was that one income stream was ample. That is no longer the case today. Success comes by developing multiple streams of income. Think of having multiple streams of income as a form of diversification. Diversifying your income streams is another proven concept for success.
The problem is that everyone wants to go from zero dollars to 6 figures and couple that with multiple income streams and do it all overnight.
Ask yourself this: If next year, with just a few hours of training per week for say 5 months, you could add an additional $500 a week to your current lifestyle, what would that do for you? Then as you approach the end of that year the $500 is increased to $750, and in 2014 that number doubles.
That is a solid, realistic, achievable plan.
The first step is to understand that forex is the world's most volatile market. This is a good thing if you are learning the correct way to make money off of that volatility.
Trend following techniques do not perform consistently in highly volatile market conditions. Scalping techniques do.
Brokers promote trend following techniques because it is an easy sell. Plain and simple. You get in the market here, sit back, relax, come back in a few days and you get out of the market there and the results are a fantastic profit. Show a picture of a luxury sports car or a yacht at this point.
That sales pitch has been around forever, yet folks still bite.
How difficult would it be for a broker to open an account and generate a commission if they told you "first give yourself 6 months to train"? Seek training from a mentor or coach who can give you one-on-one instructions on an ongoing basis for the initial six months and ongoing if at all possible. Then come back and see me to open an account. After your account is open, continue to take it slow and just make a couple of trades a week for the next few months and focus on building your profits slowly.
There goes the broker's fast track to success and generating a six figure income via the commissions he was going to receive from you by encouraging you to start trading as soon as possible.
So as this year comes to a close, think about the reasons why folks fail at trading or any new endeavor. The answer is simple: Unrealistic expectations of instant, super-size success.
Remember, mankind has searched for the shortcut to success since the beginning of recorded history. To date the only known ways to achieve it are luck or the lottery.
Show me a person who is developing multiple streams of income in a step-by-step incremental fashion and I will show you someone who is guaranteeing their long term success.
Visit www.theforextradinginstitute.com to begin building an additional income stream.
Steve is a professional trader with over twenty years of experience in the equities, futures and forex markets.
Steve is the developer of the leading edge trading methodology Thinslice Trading. Thinslice Trading allows the solo forex trader to realize consistent daily profits in a short period of time while minimizing risk.
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