In my years of forex training it seems that traders starting out in their newly found love of forex trading they are riddled with intangible forces that prevent them from successfully entering trades how they should.

There are two cases to consider here in the most basic of senses.  These two cases fall into the two extremes of forex trading styles.  Most people want instant gratification and the feeling of being a successful forex trader.  They also want the excitement that comes with making lots of money by click their mouse in a matter of minutes.  At least that is what the forex brokers have promised you in their advertising.  The style that is mostly associated with the forex market is the forex scalping method while this style is the most popular because of its ability to supply instant gratification it is more sought after than the more profitable and very boring strategy of the swing trading method.

Forex Swing Trading

Swing Trading is a trading style that simply notices changes in market sentiment and employs a strategy that is more like short term investing.  It takes very little time to execute, and once its done it takes a long time to see the results.  The results are slow, but they consistently add up to produce real forex profits.  Because traders are not actively doing anything in this trading style they don’t feel like real “traders.”  The long term approach and not seeing immediate profits also does nothing to excite and contrary most trades go through a period of losing or a negative state before going into real positive positions.  Most traders do not have the patience to trade this method and they want to do something, they want to work, and improve their trading skills.

Forex Scalping

Scalping the forex is exciting and draws most people in when trading the forex.  The caveat of this trading style is that it does require very keen senses, experience, and trading skill.  Traders start by getting free demo accounts with a forex broker and they load it up with the imaginary money they wish they had, and start trying it out.  They click their mouse, open and close trades, and whether they win or lose there is a transaction that either deducts or adds to their account.  The natural reaction is “WOW, I just made a transaction.  It took me 10 minutes to win (or lose) $200.  Now if I learn how to actually trade it our learn some system I will be able to do this all the time and make lots of money.”

While forex swing trading does not take much skill and usually works out to have a higher win/loss ratio; forex scalping takes much more skill and a natural resilience to dealing with market fluctuations.

Where I see most traders fail is having petty good results paying in a forex demo account and immediately turning that demo account into a live account with their own hard earned money.  Once real money is one the line the stakes go up which invokes a little apprehension to start with.  They immediately begin trying to scalp the forex market and because real money is on they line they hesitate in an effort to “be sure” about the trading going their way.  They enter the trade, a little late, but early enough to see a few pips of profit.

This is when the comfort starts to roll in; as soon as they start seeing the break-even point and the profit start to roll in they get comfortable and let their guard down.  This is usually when the currency pair follows it natural tendency to wave back in forth in price movements and catches the new trader off guard and before they know it (or after coming back from the bathroom), they see that they are negative and caught in a loosing trade.

Typically, everything starts to deteriorate at this point.  New traders hold on to the position going more negative, and by the time that acceptance of being wrong (when actually they were right to begin with) settles in they close the trade at a loss, baffled at what went wrong.

It’s crucial to know how markets move.  It’s critical to know when to act.  The trader in this situation, and usually most of the time is right at the very beginning of a trade.  Where they go wrong is by not knowing their strategy of getting out of the trade or not know when to get out because they can’t identify the cyclical nature of the market movements.

Starting out, its best to take the boring road and start swing trading.  Its easier to learn and easier to have success.  Then as the trader is having good experience with this forex system they can learn how to scalp the forex.  But you must be careful of who you learn from.  Do not learn from broker provided training.  Also don’t learn from free training that is recommending brokers or has advertisements of brokers on their website.  By following these simple rules it will save you thousands of dollars.

Forex Signals