There are different paths that we can take to go to one place and this is also true in forex trading. There are ways to make money when it comes to forex trading. If you go to one forex forum you will usually find numerous forex trading methods and all of them could be profitable. So why do people lose money when they have a lot of profitable trading method to choose from? The answer is very simple they jump from one forex trading method to another when they don't see quick result or when the result is not perfect. Both of them are common among new forex trader. In their mind, a working forex trading method is one that will bring positive result every time they enter and exit the market.
So should a new forex trader do to make money in forex? Well, first of all, they need to have a firm understanding/ mindset of how forex trading or trading in general works. In forex trading, you can only make money when the market/ price move from one point to another. In general, there are three market movements - uptrend, downtrend, sideway trend. Sideway trend means the price move up and down in a horizontal channel. After understanding this you then have to understand that forex trading strategy is designed by successful traders to capture specific market movement. Why specific market movement and not all market movement? It's because there is no one-size-fits-all in the field of forex. And therefore, a trading method that is designed to be used in uptrend/downtrend will fail miserably when the market move sideway. The opposite is also true. This is where newbies lose patience to the trading strategy. They think that the trading tactic that they are using is not good when they don't even know which market movement the trading tactic is designed for. The trading strategy will only make money for you if you use it properly and in the proper market condition. After this, you must know what type of person you are. If you are a risk taker then you must choose a trading tactic that will suit your need and this is also true for risk averse person. If you pick the wrong trading strategy the trading strategy will degrade your trading morale or trading psychology.
The last and most important thing is a trader must give the trading method sometime before dumping it and jump to other trading method. There are two reasons for this. The first reason is you give the trading method sometime to be able to evaluate the effectiveness and to cover all of the possible market condition. A trading strategy that is designed for sideways market and then it makes money in that particular market condition during a length of time is an effective and efficient trading strategy. You must discount the losing trades during other market condition because the trading strategy is not designed to make money during those periods. Simply count the success rate during sideway market and compare it with the success rate claim that the trading strategy designer advertise. This is what they called fair assessment. The second reason is a trading strategy is always shown with positive result and this is what makes people jump ship from one trading strategy to anothe r. People compare their trading performance with the supposedly great result of that other trading strategy and quickly realize that their performance is not good and that it is time to switch trading tactic. If you want to be fair, you must compare your own trading result from the time when you are trading using the previous trading method with your own trading result using the new trading method. Sadly, many people and especially new traders don't do this and then they keep running in the vicious circle until they realize it. Choosing a trading method is a tricky thing and it will either lead to success or doom. Understanding the basic things is the most important task to do before you go to search for the next holy grail in forex trading. Most of the problems related to trading method will be solved just by following the simple solutions mentioned above.
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