Why Forex trading is not a get-rich-quick

Forex trading is not a get-rich-quick opportunity

trading forex

The amount of money we can make is determined more by the amount of money we risk than by how good our strategy is. The old adage "it takes money to make money" is true, including Forex trading".

But that doesn't mean it's not a worthwhile endeavour; after all, there are many successful forex traders out there who make their living trading. The difference is that they have slowly developed over time and increased their account to a level that can create a sustainable income.

I always hear of traders aiming for 50%, 60% or 100% profit per year or even per month, but the risk they take will be quite similar to the profit they are aiming for. In other words, to try to make 60% profit in a year, it is not unreasonable to see a loss of about 60% of your account in a given year.

"But Andre, I'm trading with an edge, so I'm not risking as much as I could potentially earn," you might say. This is a true statement if you have a strategy with a trading advantage. Your expected return should be positive, but without leverage it will be a relatively small amount. And in times of bad luck, we can still have bad luck streaks. This way, when we add leverage to the mix, traders try to target those excessive profits. In turn, this is how traders can produce excessive losses. Leverage is beneficial up to this point, but not when it can turn a winning strategy into a losing strategy.

Lesson No. 1: You don't have to make a trade every day

New traders tend to assume that real traders at login exness enter trades every day. This is simply not true. Real traders wait for good trading opportunities and only then do they enter the trade. There will inevitably be some days when good opportunities simply do not arise. There will be days when volatility is too low to get decent trades, and there will be days when volatility is too high to safely enter trades. There can be hundreds of valid reasons when it is wisest not to trade.

The best traders know when it is time to sit on their hands and wait. Most new traders, on the other hand, force themselves to take trades because they think they should trade. And then what happens? They enter bad setups and take a loss when they shouldn't have traded in the first place. If you force yourself to take trades when there are no valid trade setups, you will lose more than you need to, which is never good. The first rule of trades is not to lose money.

You don't have to trade every day to be a trader. Sometimes the smartest move you can make is to wait until tomorrow.

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Lesson No. 2: Multiple losses are normal

Losing streaks are a normal part of trading, and you will never eliminate them. With a 60% win rate, it is statistically normal to experience 5 losses in a row over the course of 100 trades. It is not easy to calculate the expected losing streaks based on the win rate because it is complex probability maths. So if you have a losing streak, you are not doing anything wrong!

It's normal, every trader experiences them. Even traders with absurdly high win rates in the 80% range statistically have a losing streak of 3. So the next time you are in the middle of a losing streak, don't freak out and make changes to your strategy. Just keep trading because your next winning streak is just around the corner!