Having realistic expectations about how much money you can earn as a forex trader, given your particular financial situation, is crucial to achieving a consistent track record, and to actually making any money in the forex market. Traders often come into the forex market with high hopes and dollar signs in their eyes; unfortunately it is this greed that can ultimately lead to the demise of their trading account. It is important to carry a long-term attitude when trading the forex market; you must not give in to the temptation of trading the forex market like a casino. The paradox of forex trading is that the more you try to “get rich quick”, the faster you will actually lose money, so as you learn to trade you must understand early on that getting rich quick is not a realistic goal.
• What are realistic forex trading goals?
If you think you are going to double or triple your account in a matter of weeks or month, you had better adjust your expectations. The average annual return of the U.S. stock market is somewhere around 12%, yet many beginning forex traders come into the market believe they will make 50% or more in a year or less. To be perfectly honest it IS possible to obtain these high percentage returns in a relatively short period of time, but you will have to over-leverage your account or over-trade, and both of these will eventually lead to your demise as a trader because they both reinforce negative trading habits.
Approaching the forex market as a way to diversify your investment portfolio, and not expecting triple digit yearly returns, is a more realistic way to think as you learn to trade forex. If your aim is to become a full-time trader, that is fine, but you must take baby steps to get there, set shorter-term goals first, and build up to becoming a full-time trader instead of trying to “force it”.
So, your first goal could be to master one forex trading strategy on the daily charts only, and on a demo account only. After you have been consistently profitable with this strategy on a demo account over a period of months, then you can try out this strategy on a live trading account. Work to build your trading account slowly once you start trading live, if you make 5% a month, that is excellent and something to be very excited about. Don’t think you are going to make 50% a month right out of the gate, or ever. Too many traders want to make a lot of money really fast in the markets, and it is this mentality that causes them to over-trade and over-leverage their accounts, and this of course ultimately causes them to lose a lot or all of their trading account money.
• Being realistic about how to learn to trade
Having realistic expectations about your forex trading education is crucial to succeeding long-term in the market. You need to understand that learning in a haphazard and unorganized way is not conducive to setting the proper foundation for lasting forex trading success. When it comes to getting a proper forex trading education and where to obtain this from, you really need to be realistic. The best way to learn how to trade forex is from an experience forex trader, just like the best way to learn any other skill or profession is from someone who is experienced in the field. You will learn much quicker and avoid many newbie trading errors by employing the services of a genuine forex trading mentor.
Tags: forex trading expectations, forex trading success, learning to trade forex