If you want to be a successful forex trader, greed is probably the biggest obstacle you’ll have to overcome. If you try to get rich on every trade, you’ll more than likely end up blowing your account – slow and steady wins the race. It’s the great paradox that all traders face – if you want to get rich quickly, you have to do it slowly.
Imagine you’re risking your entire balance on a trade. Sure you might win the first two, or three trades and triple your balance a few times, but eventually you’ll lose one (and lose everything!). Now what if you were still aiming to make double your risk when you trade, but only risking 1% per trade? Say you place 10 trades in a week and get half of them right – 5 winners/5 losers:
10. +2 %
Total = +5%
Okay, so with your modest $5000 balance that might not be life changing ($250 a week)… but what happens when you compound that return over a year?
5000 x 1.0552 = $63 214
That’s a return of over 1260% without ever risking more than 1%. Now work out the return for the following year!
You can get rich relatively quickly through trading Forex, but it doesn’t happen overnight. It happens over hundreds, if not thousands, of systematic, high probability and low risk trades. In order to ‘get rich quick’, you have to be patient – If you truly want to satisfy your greed, keep it in check.