5 Ways To Avoid Unrealistic Forex Trading Goals

One of the main areas that Forex traders fail is in the creation of realistic goals and expectations. More often than not retail traders are lured into trading by promises of huge returns with minimal capital risk. Unfortunately as many of these individuals will soon come to realize, trading is a very difficult business and having realistic goals and expectations can help put a trader on the path towards long-term success. Intelligent Forex traders can put themselves ahead of the curve by following these simple steps.

1. Do the Math

If you are trading with a poor risk to reward ratio you are immediately putting yourself between a rock and a hard place. When you are starting out you need to identify the trades and the trading systems which are going to allow you to make the most money while exposing yourself to the least amount of risk possible. Take a look at your last 50 trades, what was you risk to reward ratio. Then compare that ratio to your winning percentage. That figure should give you a fairly accurate idea about what you can expect to pull out of the forex markets on a regular basis if you continue with your same strategy.

2. Don’t Expect Instant Returns

Trading is a business and like any other business it requires not only capital investment but time investment as well. It takes time to find your rhythm and develop your trading skills. Try not to be too hard on yourself during the learning phase and remember to focus on the positive aspects of your trading. The vast majority of traders lose money and this number is even higher with traders who are just starting out. Factor this in when you are setting your goals.

3. Skill vs. Profit

Don’t focus all of your energy on improving your bottom line. As a trader your job is to stick to your plan and find high probability trade set ups. Unfortunately not all trades work out. So if you are having a small drawdown focus on developing your trading skills. Set goals that revolve around things you can control. For example, did you get the price you wanted? Did you enter where you planned or did you break your rules and jump in early? By taking your focus off the bottom line you can develop skills which will increase your profits.

4. It Takes Money

It takes money to make money. Small accounts are fantastic for testing out whether or not trading is for you but when you get serious and want to go full time make sure you have enough capital to support your business. Solid traders should expect to make 8% in the market over the course of a month. That equates to 96% over a given trading year. Make sure this figure allows you to have the lifestyle that you are expecting.

5. Take It Slow

The best advice that I can give to a new trader is to take it slow. No one is going to become a millionaire with a $5,000 account so don’t be disappointed when it doesn’t happen to you. Focus on the positives and take profits when you can. Over time if you stick with it you will see your account start to grow.

Forex Trading can be very lucrative but inexperienced traders are usually tossed out of the markets before they have a chance to develop their skills. Follow these easy pointers and you will be on your way to carving out a nice income as a forex trader.

For professional strategies and trading mentoring, check out Lance Burkhart’s excellent e-courses on forex trading, and e-mini trading.

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