Most Forex novices think that they will achieve winning positions with 80% plus accuracy. They are also firmly under the impression they can generate massive profits of thousands of dollars using just a small startup equity in a very short time. In addition, they believe that they possess the skills to forecast major price reversals accurately.
Intense advertising has convinced them that they can easily buy or design Forex trading strategies that are 100% accurate. They have also been told that they can expect to quit their normal occupation and live totally of their Forex profits after just a few months of trading. However, if you harbor any of this type of thinking then you will need to adjust your approach to Forex trading rapidly if you do not want to incur significant financial losses.
For instance, you will need to achieve a series of profitable wins as often as possible if you want to succeed at Forex trading. However, how difficult is this task in reality, you may ask? To answer this question, consider the following example.
Envisage that for each position that you open that you will attempt to target an achievable profit of 50 pips, which could mean that your trade may have to stay active for about 5 hours. In order to acquire a good profit you will have to achieve a series of consecutive trades e.g. 15.
Consequently, this example indicates that you will have to trade Forex for about 75 hours in order to attain your proposed profits. You must understand that this is quite a serious undertaking because Forex possesses a very volatile nature and is able to generate dramatic movements in price suddenly and without any warning.
If this is the case, why are so many novices eager to become involved with a subject as complex as Forex? The main reason is that they have been seduced by intense advertising into thinking that trading Forex is easy money. All they have to do to acquire large profits is to buy the latest Forex strategy or product.
In contrast, you must change your mindset completely by acknowledging that Forex trading is all about probabilities. Consequently, you will require a set of carefully constructed and well-tested rules to help you identify quality trading opportunities possessing high profit potential with minimum risk in order to succeed.