5 Ways To Avoid Unrealistic Forex Trading Goals

Novice traders are most often undone by their inability to define realistic goals for themselves inside the currency markets

. Many traders believe they can make huge amounts of money with very little time or effort. While forex trading is a fantastic avenue for financial independence it is by no means an easy profession. New traders can push themselves down the right path before they place their first trade by sitting down and writing down some realistic goals. Here are just a few points to get you started.

1. Do the Math

Sit down and go over your expected Risk to Reward Ratio for each trade. If you have already been trading for a period of time sit down and analyse how much you are making each trade and your winning %. These two numbers will help you formulate a solid profit goal. No trading strategy works 100% of the time so you need to work out how much you lose per losing trade vs. how much you make per winning trade and then figure in your percentages. From there you should have a realistic idea of how much you can expect to make in through your trading.

2. Don't Expect Instant Returns

Currency markets are filled with professionals whose sole job is to prey on new and inexperienced traders. The traders you are up against have been trading far longer than you have and you can't expect to be able to beat them all of the time when you are just starting out. Too many traders expect too much out of their initial few months in the market. Take it slow and develop your skills and your strategy and eventually the profits will follow.

3. Skill vs. Profit

Try to come up with goals that are not directly tied to your P&L statements. For example, set a goal of following your rules for every trade for an entire trading day. Once that is completed shoot for an entire week, then a month, and pretty soon you will be doing following your rules without even realising it. Train yourself to develop your trading skills and reward yourself when you reach those goals.

4. It Takes Money

It takes money to make money. Small accounts are fantastic for testing out whether or not trading is for you but when you get serious and want to go full time make sure you have enough capital to support your business. Solid traders should expect to make 8% in the market over the course of a month. That equates to 96% over a given trading year. Make sure this figure allows you to have the lifestyle that you are expecting.

5. Take It Slow

The currency markets aren't going anywhere so there is no reason to start trading before you are 100% ready and confident. Take the time early on to learn your system and the set ups because once you start trading you need to be ready to go. The markets move very fast and if you are unprepared bad things can happen.

Take the time to go through these ideas and make them your own and you will immediately see the benefits in your own forex trading. By giving yourself the best chance to succeed you can ensure a higher probability of success in the forex markets.

by: Jeff Niles

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