Lesson 3 - Identifying Major Forex Difficulties

Lesson 3 - Identifying Major Forex Difficulties

By: Terry Allen

To achieve success at Forex, you fundamentally need to complete a sequence of consecutive successful Forex trades as often as possible. What does that really mean and is it difficult? Let us try and answer these questions by considering the following analysis:

For each trade, consider that you will need to target an achievable profit, 50 pips for instance, that may require you to trade, on average, for about 4 hours. In addition, you will then need to obtain a consecutive sequence of successful trades in order to obtain a good profit e.g. 20.

This study, therefore, implies that you will have to trade Forex for about 80 hours in order to achieve your targeted profit. This is both a long time and a very daunting prospect as Forex is anything but stable and is, in fact, capable of producing brutal, unforgiving and vicious movements at any given time without warning.

New traders think they can trade consistently with 80% plus accuracy. They think they can turn $1,000 into $100,000 in six months. They think they can predict turning points in Forex to within minutes. They think they can buy a system that is 100% accurate. They even think they will quit their jobs and make a living full time after a few months of trading.

What is the reason that so many new Forex traders believe that trading is an easy way to make money? Propaganda! We are continually bombarded in magazines, emails and the general media by claims of making astronomical amounts of money by just applying the vendor's latest Forex method or system.

Forex Trading is not an exact science. You cannot do X and get Y every time. Forex Trading is as much an art as it is anything else. There is no magic formula. Forex Trading is all about probability whereby you must apply a set of carefully thought-out rules in selecting each new trade after you have determined the chances of it resulting in success.

In addition, each new trade must be considered as an independent event because Forex does not remember if you lost or made money during your previous trade.

So and in conclusion, you must develop a mindset that will allow you to produce a Forex trading system that should, at least, be capable of overcoming all these difficulties.

In this course, I will try to show you how to accomplish this task by fusing the many discrete Forex concepts into a fully integrated trading system. One lesson will be published per day on DailyForex.