Welcome to our 20,000th member!
3 years on and we have enough members to fill a regional stadium!
But what have we learned?
I'm proud to say that our community continues to grow as a direct result of our shared vision - to make money from the FX market. It's been one hell of a ride with more false starts than I'd like to admit. With each of these mistakes it has brought us closer to the goal of generating consistent stable returns over the long term.
I'd like to share with you 5 of the most valuable (and sometimes expensive) lessons that I've learned over my 10,000 hour apprenticeship.
If you think you're going to be able to generate 10%+ per month over the long term without risking the majority of your account, quite frankly, you're dreaming.
The only way to make more money is to take more risk. While this might be acceptable for you on a small account, it's no way to make money over the long term. Could you imagine risking your yearly wage in the hope that the market turns in your favour? I've seen this happen a number of times and it almost always ends in tears.
If you can consistently make 5% per month you're outperforming 99% of the rest of the market (I made that up, but it's probably true). That's why it's important to have a long term view, be ready for a bit of turbulence and do your due diligence.
2. Never trust a trader at their word (or me for that matter).
This has been my most expensive lesson. When deciding to follow a trader each of us needs to identify a level at which we're willing to accept a loss. Don't hold endlessly in the "hope" that a trader will pull a rabbit out of the hat and the market will miraculously recover.
Know when you're willing to pull the pin and use the safety mechanisms built into the copier if necessary. I know it's a hard pill to swallow, but it needs to be done if a trader goes significantly outside their agreed parameters. Throw your computer against the wall, shout at your deaf grandmother and close the positions so you can live to fight another day.
3. Brokers are generally straight.
Many retail traders think that brokers manipulate pricing and cheat clients. The opposite is true. Brokers don't need to sabotage clients because the majority of retail traders essentially gamble their money away through bad risk management and becoming emotionally attached to positions.
I have no doubt that many brokers take the opposite side of our trades (essentially profiting from our losses). While the idea doesn't sit well with me, essentially the only difference is that the broker is benefiting from your losses instead of the other market participants.
4. Forex is a battle between market participants.
This follows my previous point. If you think your basic technical analysis using an RSI indicator to identify oversold areas coupled with useless MACD levels is going to make you rich you haven't thought about the big picture. The only way to win at this game is if you're smarter and better informed than the majority of the rest of the market.
When we win, someone else loses. This fact is often overlooked by retail traders. So the only way to actually make money is to beat those on the other side of the market consistently.
5. Trading forex is really really really hard.
Forex is sexy because of the leverage available, it's open 24hrs and has the "potential" to make us rich very quickly without the need to work for it (according to many marketeers). However we need to understand that there is no substitute for passion and hard work. If you're not willing to dedicate your life to trading forex you'll fail. It's that simple.
I realised this in the early days of the site when I ran my own signal and had clients following me. There was no way I could compete with the likes of FX Viper, TradeAlerter, Kilimanjaro or SmartTrader so I instead decided to support them and create a bridge that would hopefully allow retail clients to share in their success.
After all this I feel as though we've finally got it right. The due diligence process for new traders is extensive and the goal is for consistency, not huge gains.
I look forward to continuing to support our community across the next 20,000 members well into the future!
Regards
Nick - ForexSignals.com
