The Difference Between Good and Lucky Forex Trading

Posted by Fatimah Imah Sabtu, 14 April 2012 0 comments
The Difference Between Good and Lucky Forex Trading There is a difference between good and lucky Forex trading; they are certainly not the same. In the Forex market you want to be able to trade currencies well and make profits through hard work - not through luck.
Some Forex traders, especially beginners, think that their total Forex trading account balance reflects how much of a good Forex trader they actually are. This isn't the case though; your total account balance does not necessarily reflect how much of a skilled and talented currency trader you are. A lucky Forex trader could have a larger account balance than a good, skilled one. However, luck does run out most of the time.

If you are placing too much risk on your trades, even if you are making a lot of money consistently, it won't last. It might sound a little cynical and pessimistic, but luck does run out and you can't just rely on it when placing orders in the currency market. In order to profit in the long run, you unfortunately must work hard and put the effort in, in order to successfully trade currencies long-term. When the lucky Forex trader eventually crashes and burns, the good and skilled trader will continue to make profits (even if they are modest).

Everyone would rather see profits regularly and consistently, than see huge profits followed by huge losses.

A currency trader that relies more on luck, might conduct poor analysis (if any), have a poor Forex trading plan (if any) and use a poorly laid-out trading strategy (if any). The lucky trader will place orders pretty much at random, in the hope of making profits. Lucky traders also tend to place lots of risk onto their trades, by throwing lots of their available capital at different trades and by applying leverage. Although you could potentially make huge profits in very short spaces of time, using this approach, it will most likely cause you to deduce losses eventually that are impossible to recover from.

A good Forex trader will rely more on their previously gained knowledge and experience, as well on their both fundamental and technical analysis that they carried out beforehand, when placing orders in the FX market. Good Forex traders will have solid trading plans that outline their both money and risk management techniques etc., as well as good Forex trading systems that they have found to work through testing and practice.

Lucky Forex traders might be successful in the short run, but their successes are not sustainable at all. All traders and investors experience losses in the Forex market, but Forex trading is about minimizing those losses and maximizing your profits. So even good and skilled Forex traders will deduce losses on occasion, but the difference between the losses of a good trader and a lucky trader, is that a good Forex trader's losses are bearable whereas a lucky trader's losses are generally impossible to recover from.

In conclusion, you should aspire to become a good Forex trader, instead of relying on luck. Good Forex traders study in order to gain trading knowledge and apply their knowledge through practice, in order to gain valuable experience. You should carry out accurate analysis, develop a solid Forex trading plan and adopt a good, tried and tested trading system. Luck unfortunately tends to run out, so never rely on luck in the Forex market, or you will be gambling - not investing and any success that you might experience will only be short-term and unsustainable.

How Forex Trading Works is a resourceful website that serves to deliver free, online content relating to Forex trading, to anyone and everyone.

By Matthew Vint
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