Avoiding The Forex Black Hole
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Industry experts estimate that over 95% of new Forex traders will fail to attain consistent profitability and give up within 3 years. Thousands of very intelligent people who have achieved success in other areas of their life end up falling into the "failure category". What hurts their pride even more is that most will lose a substantial amount of money and time in the process.
There is a famous quote that you've probably heard of, "the definition of insanity is doing the same thing over and over and expecting different results". Most forex traders believe in this concept and would deny that they were doing this, but unknown to them they actually are.
As humans we are always seeking to evolve, to become better and more efficient. As traders we are evaluating strategies and constantly wanting to improve them. If every trade we took resulted in a substantial amount of pips then there would likely be no desire to change strategies, but what happens is that there are winners and loses and also winning and losing streaks.
After taking a few losses we want to adjust and improve our strategy to be more efficient and profitable. What happens for most is that it becomes an endless cycle of optimization and over-optimization. How many traders can go 2 weeks without changing anything on their charts? No new indicators, no color change, the same time intervals, etc.
Very few people can do this and this becomes "the black hole" and the insanity of repeating the same mistake over and over and expecting different results.
With any strategy you can't expect to become a master of it overnight. Just like you're not going to learn to be proficient playing an instrument or a sport in a week. To truly evaluate your forex strategy you really need to put in the screen time. |
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By :
Alex Harper
Submitted
2011-05-11 09:10:40 |
Article From Article Mayhem
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