Many new traders have heard a sad statistics that 95% of beginners fail on Forex. This number is widely spread throughout the Internet. Sometimes, I have a feeling that someone doesn’t want to let other people trade on purpose. 🙂 However, it is a great myth and no one knows the author of that statistics. Still, it confuses traders and holds them from using their full potential, as such things work on the sub-conscious level. Keep in mind, that it’s just a myth and don’t hesitate to trade bravely. The market is not something that you should be afraid of. And your success in the Forex trading depends only on you and no one else, or not on some imaginary statistics!
What are the chances to achieve success in the Forex trading?
This question needs some discussion, not the blind trust to some vague phrases from the web. So, let’s think logically and try to find evidence and proofs why success in the Forex trading is achievable.
How many non-professional traders earn money with the Forex trading?
Remember that there are always people who achieved success in the Forex trading and make money on this market. They say, there is a winner for every loser. But if we talk about consistency, it is another story. Not every trader can be permanently profitable, there are also losing periods for everyone who works on Forex, and it’s natural. Moreover, some traders do such work part-time. And when we hear that 95% traders don’t make consistent profits, it doesn’t mean they are losers. They can just dedicate less time to trading and work on Forex periodically but not permanently.
Tending to become a professional usually pushes newbies to overtrading or overleveraging.
As far as your main goal is being profitable and achieving success in the Forex trading, you can forget about such terms as ‘professional’ as profit is the aim, not some title. Set a monthly goal and you’ll notice how your profitability grows while you are not thinking of whether you are a professional or not. After you achieve your monthly goals, set ones for a week. And after you succeed with them, it will be the moment when you’ll be able to name yourself a pro trader.
Though, try to achieve success in the part-time trading before switching to the full-time one.
The main reason why you shouldn’t expect a great success in the first month of the Forex trading, is your emotional point. You will face fewer stresses if you don’t expect much from the market and your practicing. You won’t overtrade and make other severe mistakes if your expectations are reasonable. As long as you set monthly goals, you’ll have the time to achieve them. It means that you won’t be forced to open more deals to achieve an unbelievable daily goal. It may be hard to believe, but many newcomers really tend to set daily goals (for example, 20 pips per day) and that drives them to overleverage and enter the market more often.
Being free emotionally is one of the keys to success in the Forex trading. You feel more calm and comfortable when you aren’t pressed with some unachievable goals. The expectations have to be realistic and the Forex trading success always comes from within.
The true statistics says that 20-30% of traders come to their goals, but not 10-15% as many people think.
Let’s find out what are your chances to succeed in the Forex trading
Finally, it’s time to calculate your real chances on the market. Now, I’ll compare the opportunities of a trader with a strategy with one that has none.
Here is an example of break-even trading taken in terms of risk&reward.
If your R&R is 1:1, you should win 50% of all trades to breakeven. 33% winning trades are required, if the R&R is 1:2, and just 25% needed in case the R&R is 1:3.
I think that risk and reward are something that every trader should keep in mind in order to become successful in the Forex trading. This concept makes people understand that it’s nothing impossible and every goal is achievable. All in all, your chances of success are pretty high, if you have planned your Forex trading well enough.
Anyway, setting your risk and reward ratio correctly is not the only thing leading to success in the Forex trading. You always need something else to be profitable, to determine the best entry points and to forecast the price movement. As for me, I use the Price Action system. It helps me to make a consistent profit and to do that regularly.
Basing on the calculations I mentioned above, you’ll be able to perform around breakeven (and many people assume this a certain type of success in the Forex trading) even by random entering the market and keeping along with the R&R ratio. Let’s compare this to a possible success in the Forex trading that can be achieved by using some system, such as Price Action.
- If your R&R is 1:1, the chance of winning will be from 55 to 75%.
- If your R&R is 2:1, your chance will be from 30 to 60%.
- If your R&R is 3:1, it will equal from 30 to 50%.
Remember that the more is your R&R ratio, the less your chances of winning.
But why other traders don’t get much success in the Forex trading?
You may wonder why there are still losing people if the system can work this way. Here are the main reasons for that:
- they don’t imagine how R&R and money management works on the market.
- they haven’t mastered any methodology that would help them in the everyday Forex trading.
If you don’t want to turn into a loser, you should obligatory master those two points!
Earning money is not a reachless goal at all!
Yes, that’s all you need to do to become a successful Forex trader! Note, I didn’t say ‘a professional’ or ‘an expert’. Regular and consistent profit is your main goal and a specific indicator of success of your Forex trading.
Remember about the realistic goals, avoiding common mistakes listed above and practicing and mastering the 2 main points: R&R and Price Action (or any other system of your choice).
That’s all for today. If you have more questions on how to achieve success in the Forex trading, please comment and I’ll tell you more! Maybe, you’ll inspire me for writing a new article with new tips and tricks!