If you want to be a successful forex trader, greed is probably the biggest obstacle you’ll have to overcome. If you try to get rich on every trade, you’ll more than likely end up blowing your account – slow and steady wins the race. It’s the great paradox that all traders face – if you want to get rich quickly, you have to do it slowly.
Imagine you’re risking your entire balance on a trade. Sure you might win the first two, or three trades and triple your balance a few times, but eventually you’ll lose one (and lose everything!). Now what if you were still aiming to make double your risk when you trade, but only risking 1% per trade? Say you place 10 trades in a week and get half of them right – 5 winners/5 losers:
1. -1%
2. +2%
3. -1%
4. -1%
5. +2%
6. -1%
7. +2%
8. +2%
9. -1%
10. +2 %
Total = +5%
Okay, so with your modest $5000 balance that might not be life changing ($250 a week)… but what happens when you compound that return over a year?
You can get rich relatively quickly through trading, but it doesn’t happen overnight. It happens over hundreds, if not thousands, of systematic, high probability and low risk trades. In order to ‘get rich quick’, you have to be patient – If you truly want to satisfy your greed, keep it in check.
More News Posts
Dollar buoyant, equities cautious ahead of China data
The dollar hovered close to an 11-week high versus major…
US stock futures edge lower with TSMC earnings on tap
U.S. stock index futures fell slightly in evening deals on…
US stock futures steady after tech losses batter Wall St; earnings in focus
U.S. stock index futures steadied in evening deals on Tuesday…
Gold prices muted; copper weakens as China stimulus underwhelms
Gold prices steadied in Asian trade on Monday as traders…
Global Forex and Fixed Income Roundup: Market Talk
The latest Market Talks covering FX and Fixed Income. Published…
Asia stocks edge higher with CPI in focus; China falls past fiscal stimulus talk
Most Asian stocks drifted higher on Thursday with focus on…
Japan leads Asia stock rally, dollar gains after blowout US payrolls
Asian stocks rallied and the dollar reached a fresh seven-week…
Dollar poised for largest weekly gain since April, jobs report in focus
The dollar hung around a six-week high on Friday, set…
Asian stocks rise as China cheer persists; Tech tracks US rally
Most Asian stocks rose on Thursday amid persistent cheer over…
Asian stocks rise, China rallies further on stimulus cheer
Most Asian stocks rose on Wednesday, with Chinese markets seeing…