Why Being Realistic With Yourself is the Best Trading Strategy

by Andrew McGuinness     Jul 16, 2019

The prospect of "easy money" is one that attracts a large number of investors to taking a leap towards Forex Trading. While there is plenty of money going in and out of the Forex market everyday (to the tune of over $1.9 trillion!), trading currencies is not the get-rich-quick scheme that many beginning investors believe it to be. The truth of the matter is that, regardless of any success stories you hear of the news or charismatic salesman selling you the secret to getting rich via trading, chances are high that you will not be able to quit your day job and live full-time off the profits from your trading.

This is not to say that trading currencies is not profitable; and there are in fact many people who have gotten rich and made millions trading. But, the odds say that you will likely not be one of those people. Before you get angry and throw away your computer, understand that the reason I'm saying this is not to discourage any future traders or to keep more of the market for experienced investors. The secret to successful trading, and the best trading strategy that there is, is the ability to be realistic with yourself before you enter the Forex market. Understanding how to formulate realistic and honest goals can mean the difference between making a tidy sum trading or losing money- which no one wants.

There are many trading systems that work, both on the Forex market and the US Stock Market. However, the problem that many beginner investors encounter is that they buy into trading systems that make outrageous claims, and are then disappointed when they inevitably realize that their trading system of choice isn't working out for them, solidifying the disclaimer at the end of the commercial that states "results are not guaranteed." Finding the right trading strategy for you is not a way to become a millionaire overnight like many commercials and "gurus" tell you it is; this is especially true if you are interested in entering the Forex market because, while relatively more stable when compared to the equity market, requires much more research and time investment in order to turn a significant profit.

In order to begin to learn a successful trading strategy, you need to be brutally honest and realistic with yourself- and especially your negative qualities. Do you only have a small amount of money to invest? Are you an impulsive person who has a tendency to jump on the first hot thing that seems appealing? Are you prone to making decisions before you have all the facts? Were you always unable to complete the homework when you were in school because your head was off in the clouds? These types of characteristics will all be a detriment to beginning traders, and picking a one-size-fits-all trading strategy cannot compensate for these personality traits.

If more traders were honest with themselves and tailored their trading strategies to work with their negative personality traits instead of optimistically believing that the Forex market is destined to make them millionaires, the world would have a lot more wealthy traders.

Get unlimited access to our Learning Center,
Broker Insights and Exclusive Promotions for Free!