It is often said that 95% of people who trade the foreign exchange markets lose money, while only 5% of people actually make money. To begin with, this means that those 5% are making an awful lot of money, because for every loser, there is always a winner. This is the very nature of the markets.
I believe that these losing 95% are in constant flux. People enter the markets with a dream of giving up their day job and trading for a living. However, they often make the mistake of thinking that it is going to be easy because they know they are of above average intelligence.
These are the dreamers. They do not do their homework, they do not respect the markets, and as a result – they inevitably get strung.
The people who succeed in the markets are the realists.
They expect to make mistakes and to lose money when they first begin trading, and they view these losses as their ‘tuition fees’ for learning to trade. They respect the markets and try to learn everything that they can about them.
They practice day and night like a sportsman (or woman) who wants to turn pro. They have complete and utter dedication to their craft and they see it as a long-term pursuit, not a get rich quick scheme like the dreamers do.
Are you a dreamers or a realist?
If you are new to trading forex, you need to identify yourself as being either a dreamer or a realist. If you are the former, then perhaps you should re-evaluate your motives for entering the market.
Don’t become one of the 95% who enter the market, dream for a while, and then leave the market with less money than you came with. Be a realist and take a long-term approach – study, and then study some more. Who knows, if you do this, you just might break into that elusive 5%.
Source: June 22, 2012 By Jay G