“You have nothing to lose and our forex training can change your life”. This is how many fx training providers get amateurs into the forex trading game.
The truth is that you have much to lose:
- belief in yourself,
- belief in the system and, eventually,
- repeated losses will let you lose your sense of humour.
And then the emotional trading starts, which always ends in ruin.
The reason is that fx trading is not an easy way to make money and you cannot take your last month’s salary, sit on a beach, and earn a million Rand a month.
Because what is possible in theory, is rarely possible in practice.
Where does the discrepancy between reality and theory comes from?
Firstly, success depends on the ability to repeatedly get a positive result. Often, when we hear about the success of a trader, investor, strategy or system, it reflects one successful action.
One positive outcome does not represent success. Even a blind pigeon sometimes picks up a kernel.
The question should not be how successful your trade was, but how many times you could repeat the positive outcome.
If you have R500 000,00 to trade with and you are able to make a profit of 100%, you have R1-million.
In South Africa you will have to pay tax on the R500 000 profit, which will be at least 25% or R129 000. Which leaves you with R371 000 or the equivalant of R30 000 per month.
To reach that, you need:
- Trading capital of R500 000,00
- 100% profit on your capital after losing trades
- The ability to repeat it before the profit has been exhausted
The dream of using a system that is infallible and can generate profits of 50, 100 and even more percent, is just that – a dream.
It is possibly rooted in the belief that when people are successful, it seems easy to do, looking from the outside. The labourer always thinks the boss who sits behind a desk got there without effort and stays there because of privilege or system manipulation. Never as a result of mental rather than physical effort. Nobody ever works as hard as “I” for success.
Forex trading demands exceptional mental and psychological effort. Like anything worthwhile, trading success requires a price. And because the potential is high, the price is high.
Trading is like any other skill. It is difficult to learn, and the more professional the trader is, the easier it looks to the uninformed.
A characteristic of professionalism is that it makes something difficult look easy.
When you consider trading forex, keep in mind that
- 98% of traders are not profitable
- the “market” needs a constant flow of money to enable successful traders to remain successful (translation: the market needs stooges – or cannon fodder – so that there are always amateurs from who the professional can take).
There is a saying that you make money from poor people because poor people spend, rich people save. Poor people consume, rich people produce. And that has more to do with a state of mind, than from economic needs.
To give context to why it is not possible for you to continuously double your money (whether daily, weekly, monthly or annually) read about the wheat and chessboard problem
So, if you are looking for a quick and easy way to become rich, don’t buy the hype. In fact, don’t buy anything, because getting rich is neither quick nor is it easy.
If, however, you look for a way in which to make an extra income or even a living, try forex trading like you would try any other career:
- Research to learn everything about the industry
- Gain insight into the philosophy of the industry
- How is failure defined?
- What creates failure?
- How is success defined?
- What creates success?
- Are you prepared to pay the price of learning and the price of living a trading life?
- How will you move from the 98% unsuccessful traders into the 2%?
Then open your demo account.
Keep the money you saved by not buying into a get-rich-quick-while-lying-on-the-beach-system ready for when you are ready to start live trading.