Chapter 3: Simplicity is one of the keys to making money in Forex.

Simplicity is one of the keys to making money in Forex.

What is a one of the biggest paradoxes that forex traders who make it to the point of being consistently profitable realize? That making money in the forex market does need to be difficult, confusing, frustrating, or expensive. That is not to say that it will not take effort, passion, and discipline on the trader’s behalf, because it most certainly will. However, many beginning traders have ideas about what it takes to trade successfully and make good money in the markets that are simply unfounded or based on misinformation.

The primary reason why many traders erroneously believe they must use complicated trading strategies to trade the market with, is because there are thousands of scammers and marketers on the internet trying to make a quick buck off of uninformed aspiring forex traders. The truth is that you can make money by learning simple forex trading strategies such as simple candlestick patterns, price action trading, or other simple strategies that do not really too heavily on indicators or other unnecessary analysis tools. Many traders feel like they need to purchase expensive and complicate trading systems because they are marketed in such a way that makes traders feel like this. Very often you will come across forex trading “robot” software websites that post graphs of insanely high annual returns or other such results that look too good to be true. Like anything else in this world, if it seems too good to be true than it mostly like is, keep this in mind as you comb through the countless web pages of forex trading training products.

You might be wondering at this point WHY simplicity is a key to making money in forex. Well, the reason this is true is because the biggest percentage of forex trading success depends upon a trader’s ability to maintain self-discipline by correctly managing his or her risk on each trade and by not over-trading. There have actually been studies done that have proven you can make money with a random entry method if you are practicing proper risk management and have a strategy to make sure your winners outpace your losers by a solid margin. Obviously, we can put the odds even further in our favor by learning effective forex trading strategies, of which there are some very simple yet effective ones.

Not only are complicated forex strategies unnecessary to making money consistently in the market, they can actually be significant impediment to your success. Often what ends up happening to traders that use such overly complicated trading methods that are likely based heavily on lagging indicators or software programs, is that they begin to become confused by all of the “junk” on their charts and once they realize they aren’t really making money with the method they are using, they then decide to switch to a different but equally as complicated trading method. The problem is that many traders erroneously believe they are not making money in the markets as a direct result of the particular trading strategy they are using. In reality, most traders do not make money because they don’t properly manage their risk and they have little or no discipline when trading. Using a complicated trading strategy is typically not the root cause of trading failures, but it certainly contributes to them and does not make trading any easier.

Chapter 4: Stop over-trading if you want to make more money in Forex.