The vast majority of foreign exchange traders go through the same phases in their careers with only minor differences. If you have recently become interested in foreign exchange trading then you would do well to be aware of the path that you will be treading on. It is like a map.
If you know the obstacles you will face and the problems you will have to deal with, you will be more careful and probably not suffer as much heartache as you would if you were oblivious. Here are five stages that virtually all traders have gone through and all traders will go through.
Not Knowing Your Lack Of Skill
In the first phase of your foreign exchange trading career, you would begin trading but would most probably not know what is needed to be successful. In fact, it is likely that you are very confident as well because you think that it should not be too difficult to project forex rates when all you have to do is use certain systems and keep an eye on certain news items.
In this stage, you will quickly realise that you do not have the skills to be successful yet. Unfortunately, for most traders, this realisation is a result of a series of losses in the foreign exchange market.
Knowing That You Lack Skill
The moment you realise that you do not have the right skills to be a successful foreign exchange trader, you move onto the second phase of your forex trading career. In this phase, you will try to take advantage of the various forex related resources available on the internet.
You will buy automated systems, eBooks, guides, and read a lot of blogs. You will also feel tempted to try forex signals services. This phase usually lasts for a considerable amount of time, but even in this phase you will be unable to make a lot of money.
Realising The Secrets
After probably losing two or three accounts, you will come to the realisation that foreign exchange trading is not about projecting rates but taking into account all contingencies in an objective manner.
This is the moment when you will realise the home truths of forex trading such as the need to rein in emotions, the relevance of special orders, the extreme importance of money management, and even the significance of consistency.
After realising what you need to do, you will hunker down and do everything right to the T. You will be doing everything consciously however, which means that there will be moments where you will slip up and incur some losses.
After you have made a few mistakes and have tried to be as disciplined and consistent as you can be, you will gradually start absorbing your intended actions into your subconscious.
This means that you will soon not need to be consciously disciplined and consistent as these qualities would start becoming second nature to you. This is when you have arrived and are now a successful foreign exchange trader who makes profits consistently.