The fact is - 95% of Forex traders lose and this is despite the fact, that anyone can learn to win and a major reason traders lose is they pick a strategy which is doomed to failure from the start. Lets look at some common losing Forex strategies, you need to avoid and ones that can put you on the road to Forex trading success.
Before we start, lets make an obvious point and that's Forex markets are driven by human's and human's are creatures of emotion, not of logic. This mean's you should avoid predictive systems which claim they use mathematics, to predict the future. The most common strategy novice traders use which is doomed to failure is the following:
1. Using a cheap Predictive Forex Robot
Traders continually buy, cheap Forex software and believe the hype, that these systems can predict the future and make them a regular income. Of course, the predictions these packages make regarding the direction of Forex prices, end up as accurate as a horoscopes and lose money.
You don't get rich, by paying a hundred dollars or so and making no effort. Despite the fact it's obvious, that making money with no effort is to good to true, traders continue to buy these packages and lose.
2. The Fibonacci Method of trading
Fibonacci was a brilliant thinker but even he, would be bemused by the way his theory is applied to Forex trading.
You are supposed to believe there is some universal law which makes certain retracements valid on a Forex chart. Now, they do work sometimes but pick any number out of a hat and that will work sometimes too! The farout crowd love this theory with its mystical background but if you want to make money, avoid any theory based upon the Fibonacci number sequence.
3. Forex Scalping and Day Trading
The fact is in short periods of time (within a day) all volatility is random and because of this, support and resistance levels cannot be used, because you can't get the odds on your side. If your try and trade off hourly charts or shorter time frames, then your bound to lose sooner, rather than later. There is no point in trading within random volatility but traders still see this method as a low risk way of trading but it's one of the highest risk ways of trading you can do.
So how do you win at Forex trading?
Get a simple Forex trading strategy and forget trying to predict - Forex markets are a market of probabilities not certainties. When you trade Forex focus on simply trading the reality of price change as it occurs and focus on the long term trends which make the biog profits and forget about trading the short term noise, where you can't get the odds on your side.
Sure, you won't win every trade but if you keep your losses small and run your profits, you can make a great second or even life changing income.
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