Can you trade for a living and become a currency trader from home? The answer is yes anyone can, as forex trading is a specifically learned skill – but you must be aware of the pitfalls and unique challenges it presents …
Let me give you a rather inspiring story, to get you in the mood to trade for a living.
It's a famous experiment and it was conducted by trading legend Richard Dennis.
He always believed that traders were made, not born and with the right education and mindset, anyone had the potential to make money. He decided to prove the point.
He gathered a group of people together, who only had one thing in common – they had never traded before. In the group there was an actor, a security guard and a female auditor, so a diverse group and he set about teaching them to trade.
They had 14 days training, were given live accounts and went on to make $ 100 million in 4 years – Dennis had achieved what he set out to prove.
This throws up the question – if anyone can learn and succeed, why do 95% of traders lose their money?
The answer is trading is NOT Just about learning a method, it's about executing it with discipline.
Most traders have no idea of the reality of forex trading and the pressure it puts on you mentally.
You need to stay cool, calm and disciplined while your emotions are screaming at you to do the opposite. You have to stay on course, when the market is doing this to you:
– Giving you a string of losses and making you look stupid so you doubt your method
– You need to trade against the major view and we are pack animals by nature and do not like to be isolated
– Whenever you have a position, greed and fear linger in the background
Many people will tell you that you can avoid long, losing periods. You can not, even the best traders have drawdown periods, that last for many weeks also, if you think holding a position is easy when everyone disagrees with you – you probably have not traded.
Dennis of course knew the above.
It's all well and good having a sound method – but you need to be able to execute it with discipline – if you can not do this, you do not have a system!
Many people think forex trading systems need to be complicated but they do not.
Dennis taught a simple long term trend following breakout system, anyone could understand.
He however did more than give them a method, he got them confidence by not telling them to follow him – but keep them all the reasons why the system worked. They would then he assumed, have the discipline to trade through losing periods with strict money management tools.
A Graphic Illustration of Discipline
In interviews with the group, they often noted the system was not hard to learn – but holding their discipline was.
How difficult it was, can be seen by the varying results.
They were successful as a group – but some more than others. If you want the perfect example of how difficult discipline can be, then this example provided it.
Most traders lose, because they do not have confidence in what they are doing, or a set plan and most traders can not keep their emotions in check.
You Do not Need to Work Hard
Many traders think working hard, or using complicated systems can help them but they can not. We have seen vast advances in software and forecasting in the last 30 years yet, the same percentage losses – 95%. So trading is reliant on "something else" and its mindset.
Trading is all about the combination of method and mindset.
Anyone can learn a successful method however not everyone can get the right mindset to apply it.
So can you trade for a living?
The answer is the opportunity is there for all, if you are prepared for a unique exciting, challenge and prepared to do the basics and understand discipline is the key, you could trade for a living or earn yourself a lucrative second income.