One Step Ahead From Understanding Forex ...... Mastering Forex

Many are intimidated by the idea of becoming a forex trader. It seems like the domain of professionals and talented traders who know what they do and can manage their risks optimally. Although it is true that greater skill is a great advantage in forex, it is not necessary that you master every aspect of economics before you will be reaping the benefits. Currency trading is in many ways akin to gambling if you’re a short-term trader. Mastering it is more like mastering yourself than mastering any indicator or strategy. Do not just take our word for it, many of the great managers of our time and the days bygone were masters of various card games, the most popular two being bridge and poker.

So in other words, trading is not necessarily a science, it doesn’t have to be boring, and it most definitely does not require a university grade, or any kind of academic achievement. Some bright minds are good at both trading and the theory of economics, but that’s more a rarity than a common occurrence. Instead of intricate technical details and vast knowledge the acquisition of which would perhaps take more of a retail trader’s time than what is available, you need to focus on the emotional and psychological aspect of trading. This approach is also reinforced and justified by the fact that we can only be sure and safe about our choices in trading. Any experienced trader will tell you that the market is most of the time unpredictable in the short term. Although analysis is good for clarifying many of the mystifying aspects of trading, it is only useful as a guide, and not as a compass in our trading decisions. Like a guide, it can err, and unless we make sure that we take precautions against unexpected eventualities, there will be many unnerving problems on the way.

So how to succeed, you ask. First, you should end trusting on technical tools as predictors of future price action. They really don’t have this role, and their real value is in helping you formulate and systematize your strategies and entry/exit points doing trading. Secondly, you must prepare for losses. It is important to adjust the risk/reward ratio favorably in every trade that you take. Finally, don’t be discouraged or upset by losses. Losses are really as natural to trading as is CO2 is for life. We don’t depend on CO2 to be alive, but life would be unthinkable without it, since it is an inseparable part of the process. Losses are just like that. You live with them, experience them, and manage them to maximize your profits and to justify your losing trades over time.