No Profit in Forex Trading - You are the Reason!

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In one of my recent articles I have mentioned that along with trading in the small charts, the next reason why you lose money trading is you. That's right. You are the problem. Eliminate YOU, add a decent technique and you are on your way to the stars.

Eliminate you? Let's look at what happens in a typical trade executed by a novice but properly trained trader.

As I mentioned you already got some professional training and like any good student you do your homework - learn the theory, find a nice little technique, practice alongside an expert in a demo account and see that it is possible to make money. You are now a true believer and the master of the secrets - you know the tricks, you can anticipate every move the market makes. Am I still talking about you? If not – stop trading and get back to the training part.

So you know your stuff and it is your live account today. You wait for your setup, the market comes to you and the order is placed. It even happens to be a perfect textbook example. Easy money is on the way and you are pleased with yourself. The P/L line shows that you are at negative 2-3 pips but you anticipate covering that spread cost in the next few moments and then it is an open road to the much deserved profits. You are confident. Your technique is sound and proven. It works as you've seen and practiced. You even have the next most important piece of the puzzle – the sound money management in place. Your conservative risk is at maybe 1 – 2% of your equity available. You are 100% confident that this is the beginning of your financial freedom. No doubt in your mind and you deserved it - You've paid your dues.

It is now 2 hours or 2 days later and you have lost; many trades. Sure, the market DID what you had predicted. Many pips have been made – But not by you.

So what happened?

Even though you have the "know how" and the practical experience to go along with it, the fact remains that the market can not be 100% predictable. In the back of your head there is always a fear that you might lose in this particular transaction. At some point you will lose. You may have tens of trades that are positive and profitable, but sooner or later one of the currency pairs will get you. Your problem is that you seem to lose every time. The reason: in your mind you carry over the fear of that one bad trade that is going to come at some point to EVERY trade you do. You were supposed to lose only here and there, but the fact remains that every next transaction carries the same risk of going against you no matter how small that risk is. This is in the back of your head and not knowing when the bad trade will come, you over react to any small deviation of the trade from your projection.

So, your fear of losing turned a great profitable trading technique into an account killer. The source of your fear is that the money you have funded your account with was not the money that you could afford to blow just like most of the novice traders. You did not have the luxury to allocate the trading money in your "business plan" as write-off money that is insured or that can be a tax deduction. Oh no, in your case the only deduction is directly from your pocket.

The solution: If you learn anything from me learn this - NEVER MOVE YOUR STOP LOSS UNLESS YOU ARE IN POSITIVE, (similarly, never close your position prematurely - let the market close your position instead). Remember, when you set your stop loss, it is that money that you are prepared to lose. Think of it as lost before you even enter the trade. If you still fear it, then reduce your lot size until your potential loss is so small that you do not care. Do this and you will be surprised how quickly the profits will come. Of course, if you hit your stop loss every time than you just don't have a clue how to trade.

Article Source: http://depositarticles.com/

Marijan Koturic is an expert Forex trader and broker and actively trades the currency market. He has developed a unique "no-nonsense" approach to trading and strives to help others improve their trading results. His philosophy and some of his techniques are readily available at his Forex resource website www.koturic.com

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