Forex trading is often perceived as a very enticing get-rich-quick activity.  Many online and offline advertisements seem to suggest that we can build a superhighway to financial freedom via clicking the mouse a few times every day. Certainly, I am not against a healthy motivation to get some good education in trading the Forex market. Indeed, in my training workshops, I always feel compelled to shed light on why mastering the Forex market has been such a challenge for most people, and how aspiring traders should re-condition their minds to change many counter-productive belief systems which cause most to fail in this pursuit.Within the community of aspiring traders, there is a prevalent “Holy-Grail’ mentality which causes many traders to believe that once you identify a winning formula, you are all set to consistently take money out of the market. For the vast majority of traders, the constant search for such a “formula” becomes a very futile and endless journey, for they never learn the real reasons underlying the successes and failures of traders.  

As soon as we attain a certain level of competency in studying chart patterns and indicators, the most crucial determinant of trading success lies in the ability to master ourselves. As such, I always advocate spending more time on one’s mental strategies, rather than endlessly pursuing new and sophisticated analytical tools and indicators.

For the month of Jan’10, the return on this account was about 17%.  This time, I experimented having no explicit take-profit levels specified; positions were closed based on certain technical conditions signalling a possible reversal or a potential exhaustion of the trend. Such an exit rule serves the same function as trailing stops, so that we minimize losses when the market moves sideways, and allow profits to run when the trend is strong.