Forex Traders Daily

The Internet is replete with so-called "expert" advice on just about everything...and the foreign exchange Market is no exception. The trouble with all of this is that bad advice is often given and repeated until it becomes accepted wisdom.

Following is our list of the top ten fallacies concerning the Forex Market:

1. You have to predict accurately to win in the Foreign Exchange Market.

This is inherently wrong, as there is no sure-fire method for making absolute predictions. Conditions are fluid. Too many factors are beyond the realm of absolute predictability.

2. Trade the trends.

Closely related to the first fallacy, this is also dangerous, because most people understand this term to mean "follow the trend." Trend-following systems are forever being developed and implemented. The trouble with that thinking is that it does not allow for the inevitable corrections and flats in the market. Trend-followers generally lose more than they gain, because the market takes from them more than it gives.

3. Markets dance to a scientific tune.

Many believe that Markets move to a scientific theory. A little sound reason refutes this idea. Think about it: if the market moved to a scientific formula, such as those propagated by Gann, Fibonacci and Elliot, everyone would know the price in advance, and the market would cease to exist.

4. Tight stops are foolproof.

The trouble with such thinking is that any hard stop of less than 50 pips has no real chance of surviving, due to Market noise.

5. A complicated, complex strategy is the way to go.

Truthfully, simple is more effective. The more indicators you have to monitor, the more elements there are to break down and throw you off your game.

6. Asset management is as simple as implementing stops.

Placing stops does not equate to managing your money. Such management is more about realizing the relationship of risk to reward, knowing what you have to gain and what you can stand to lose in the pursuit of success.

7. I can prevent future losses entirely by learning from the losses I have already suffered.

Certainly, a person who fails to learn anything from a loss is bound to repeat possible mistakes. However, anyone who trades on the Foreign Exchange Market - or any financial market -- for a substantial period is going to suffer setbacks along the way. It is the big picture, the overall promise of the market that has record numbers of investors flocking to it.

8. "Where there is smoke there is fire."

With the advent of the Internet and the proliferation of websites, blogs, and chat rooms devoted to Forex trading in particular, rumormongering is a way of life. Often, a rumor that has no basis in truth is born of deceit and spread in ignorance. Sometimes, smoke is nothing more than a smokescreen.

Will Rogers' whimsical advice, "Believe half of what you see and none of what you hear," may be extreme, but in the forex market, it might be a good approach.

9. You don't need a plan to trade currency.

Someone has said, "No one plans to fail, but many fail to plan, and thus do in fact fail."

The Forex Market has its difficulties, ebbs and flows. To succeed in the long-term, you have to plan your work and then work your plan.

10. Trading is a great way to get rich quickly.

Most short-termers are also short-timers. They lack the stomach and the capital to stay in the game. For the patient, committed, informed investor, Forex is a promising and lucrative Market. Most "wanna-be" traders do not fit the above description, however, and ultimately lose out.
Welcome to the exciting world of Forex trading! Just watch your step, avoid the fallacies, and forge ahead into an exhilarating and profitable venture.

Concerning this market, Pass says, “The most important thing to learn about the Forex market is that although trading in it is enjoyable and exciting, there is no magic potion that will instantly turn your $1,000 into millions.” Pass insists that education is the only foolproof way to earn money consistently on the Forex. He cautions investors about the importance of listening to and learning from those with a proven record of accomplishment. As with all education, it is important to be sure you are trained by a credible source.

Forex Trader's Only Hope of Success

Dustin Pass preaches continuing education as the Forex trader’s only hope of sustained success. The Foreign Exchange Market is dynamic and ever changing and evolving. When a trader ceases to learn, he will soon cease to earn. Because this market is fast-paced and complex, he insists that every successful trader must become proficient in three paramount disciplines:

1. fundamental analysis

2. technical analysis

3. self-analysis

It makes sense that a trader must know the basics, or fundamental principles, of any market in order to succeed in trading therein. It is also obvious that some technical analysis is essential to success in the Forex, since it is a highly specialized, technical field. You don’t have to be a “whiz,” but you have to be aware. If you are not…then, beware!

Letting Go of a Trade

While most investors readily see the need for the first two areas of analysis, they fail to appreciate vital importance of the third element. Know yourself! Know your strengths and weaknesses. Be honest about your emotional makeup and how it might influence your decision-making. Know your tolerance for risk. Know your risk management skills, and hone them. Know yourself, and “to thine own self be true!”

You must also be willing and able to let go of a trade. When it is done, let it be done and move on. That goes for your successful trades as well as the ones that did not go well. Make no mistake, if you trade in the Forex for very long, you will suffer setbacks. Not every trade will be a winner. If you are immobilized by failure, then you will fail. If you linger too long on your past successes, you will miss future opportunities.

Dustin Pass: Never Quit

“Never stop learning,” says Dustin Pass, “And never quit.” Many have followed his advice, learned his methods, taken advantage of his guidance, and enjoyed tremendous success.
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If you have the desire, the determination, and the willingness to learn and keep on learning, you could be the next Dustin Pass success story. The first step is the most crucial.

It’s your move!