How to Make Money in Forex
When we trade forex, I believe we all want to achieve one thing:
That is to make money in forex.
It’s pretty obvious isn’t it.
However, the fact is, most of the traders aren’t successful in live but they make good money in demo.
The answer to this leads to the topic:
How to Make Money in Forex
You see, when we trade our demo account.
We are pretty much in a relax state of mind.
And when we trade, we have little consideration – after all, it’s not real money!
Therefore since it’s not real money, we are not overly involve mentally.
Even if we make a loss, it’s not our money. So we feel none to little pinch.
When we have that relax state of mind, whenever we put a trade that has been planned.
Eg. we have set our profit target and our stoploss point.
We will let it run.
And sometimes, due to other work commitments.
And as we are still demoing forex (forex is still just a “play thing”)
We would come back 1-2 weeks later to check the market and the status of our trades.
And only to realise that our trade has been closed and our account is making money.
And there could also be occasions where we place a entry trade and decided to trail.
But we forgot about the trade and 2 weeks later, when we turn on our forex trading platform.
Wow, we have a nice surprise! Our trade is still running and with a HUGE profit!
Forex is not that difficult after all!
Let’s go LIVE & Make some Money
So, we fund our live account.
And we start to get all nervy and anxious.
BECAUSE WE ARE ABOUT TO MAKE SERIOUS MONEY!!!
And as it’s real this time.
We decided to pay more attention in forex.
Find more opportunities to maximize our returns.
Because the last time in demo, we were just trading normally, without much effort and wasn’t really finding trades.
So this time round, if we pay more attention and start finding trades. We will make more money!
We started getting into trades, and we started watching the trades we entered.
With every dollar going up, we feel great.
With every dollar going down, we felt the stress and the uneasiness.
And so we started monitoring the trades and try to get out before it hits our stoploss.
And on another case, get out for some quick money first although its far from our take profit point (because it might reverse down, right?).
And then after losing a few trades, our capital went down.
We figured, let’s increase the lot size!
And make back the money lost, and get more profits this time.
And before we know it, our account got heavily depleted.
What Went Wrong?
We were making good money in demo, and infact making great returns on demo.
But in live, we are losing money.
Are the forex brokers eating our money? Are they cheating us?
Is the market against us because they know that we are trading live this time?
The answer is none of the above.
The fact is, nothing changed.
- You went from relax to anxious.
- You went from not monitoring trades to constantly monitoring of trades.
- You went from not touching trades that you entered, to editing your trades and get out for a quick profit or a small/huge loss.
- You went from trading little, but prominent trades to finding lots of trades to enter so that you can maximize the returns.
- You went from calmness to greed and then to fear, then to desperation.
These are what that caused your failure.
Let’s Work Backwards
And if that’s what caused our failure.
Shouldn’t we reverse engineer it and work backwards.
By entering a trade with a relax state of mind, and only finding prominent trade setups.
Spending little time monitoring the market, turn on forex only when you are free.
Once entered a trade with the preplan take profit and stop loss levels all set.
- We forgot that trade. (it’s erased from our memory)
And then when we are free again, we find another good trade and we enter again.
Because forex is not that important, and we are only “testing” this new toy “part time”.
We don’t need an income for this.
We are only playing a game of forex during our free time.
There is no urgency behind it to grow our account.
And so we pay “minimal attention to forex”
If you are too stressed out in forex, and spending too much time in the market.
Try this for a while and see how does it work for you.
I’m not saying to totally neglect forex, the main idea is to not let forex affect you in any way.
Whether it’s a profit or a loss. It’s of little significance.
And you can afford to forget a trade you entered for 1 to 2 weeks and then come back again.
The idea is to make it so INSIGNIFICANT.
When that mindset is built into you.
You will have less feelings and emotions when you trade.
And you do not monitor or touch your trades anymore.
As ironic as this sounds.
The take away is:
Make Forex INSIGNIFICANT in your life. Just treat it like a game you play on your free time. Like a mobile app game.
You see, people take Forex Tooooooo SERIOUSLY
When that happens, the results are disastrous.
So take that demo trading mentality all again and forget that your account is real.
It’s now just a “demo real account”. Just a toy. Just for fun. :)