Introduction
Everyone getting started in Forex trading does so as a means to an end. For some, it may be to create an additional stream of passive income, for others, it may be to achieve financial freedom and build wealth. That's the one thing that everyone getting started in Forex trading has in common: they're all in it to build a better life. There's always a danger that one will get impatient and try to achieve that better life faster by taking more risks, and this is one mistake that will destroy your trading account if you allow yourself to fall into that trap. By the end of this article, you'll know how to avoid that one mistake that every beginner Forex trader makes, and build lasting Forex trading profits for you and your family.
The One Mistake That Every Beginner Forex Trader Makes
The one mistake that every beginner Forex trader makes is to allow their greed to dictate their trading. When you're getting started in Forex, you may not have all that much money to start off with. In fact, the average deposit of a new Forex trader is between $2,000-$5,000. With that amount of money starting out, you can expect to make a good $200-$500 a month, which is fantastic compared to what the banks or any other investment vehicle will give you.
Somehow or the other, we've been led to believe that we can have more. That's what greed is: an insatiable hunger for more and more and more. There are people out there that would tell you that you can make 100% or even 200% a month, and turn your $5,000 into $50,000 like clockwork in a matter of months. Yes, it's possible for you to do it, but it comes with a price. There's a very real possibility that you will blow up your entire trading account if you try to gun for such high returns.
How To Build Lasting Forex Trading Profits
The secret to building lasting Forex trading profits is to have a profitable Forex trading system in place, and more importantly to limit your risk on each trade. You may be used to risking 10% and upwards of your trading account, but even with a profitable Forex trading system in place that's a recipe for disaster. That's because no matter how profitable your system may be, it will still experience losing streaks that will be completely outside the realm of your expectations. If you're risking big on your trades, then you'll wipe yourself out when one of these losing streaks hit you.
So what's a safe level of risk to trade your account on? I recommend risking no more than 2-4% of your account depending on how aggressive you want to be. You risk 2% if you're conservative, and up to 4% if you're super aggressive. Anything below that will result in vastly inferior trading results, and anything above that will put your account in serious risk of a blowout.
Keeping your risk low is the cornerstone of successful trading, because it keeps you in the game long enough to allow your profitable Forex trading system to compound your profits for you. If you're starting with $2,000, don't try to turn it into tens of thousands of dollars overnight. Build it up with regular additional investment and reinvest your trading profits, and soon you'll have a capital base that will bring you the level of Forex passive income that will give you the better life you desire.
I've been a full time Professional Forex Systems Developer since 2007. Forex trading is my passion, which is why I really love helping anyone to overcome their challenges and become profitable in their own Forex trading. If you're just getting started in trading Forex, or if you'd like to take your trading to the next level, I'd love to help!
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