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What is the Reason Why So Many Forex Traders are Unsuccessful?

I had the opportunity to talk with Bill Poulus recently and asked him that question. Are you aware of what he said?

“The majority of experienced Forex traders do not move soon enough to protect their positions and they often stand by as their profits evaporate.” He also went on to explain a simple concept, not unlike Gambler’s Ruin that is pervasive in the Forex trading world.

Quite simply, once a trader notices his profits in a trade slipping away, he becomes obsessed with recouping the lost profits. It slips their mind that it is necessary to protect profits that they have realized in the trade. What are the outcomes? The trader becomes increasingly frustrated as the reversal continues and the trade’s profitability dwindles until it becomes a losing trade.

I have seen this personally and it is extremely simple to fall into this trap because you are just positive that since the Euro just hit that intra-day high, certainly it can hit it again! But… that does not happen. It continues to retreat, turning your 20 or 30 pip gain into a 20 or 30 pip loss instead.

This example might be extreme, but have you experienced this?

What should be your next step?

Bill has a suggestion for that as well.

He stated that the majority of traders are unaware of the profit potential for any single trading event – in other words, they do not set profit targets at which they take profits off the table, exiting the trade in several steps. And, a Forex trader who lacks a strategy that focuses on protecting capital and manages profits secondarily will not be able to survive in the foreign currency markets.

In order to be correctly positioned, it is essential that traders have a strategy that consists of several parts – one in which they learn how to identify the BEST trades available, clearly delineates a profit target, assists in the management of taking the profits off the table and from the start, teaches traders how to protect their precious capital!

He refers to this as handling profits second, and controlling the risk first, and it’s really a new way of thinking.

The first part of his new, free video series can be viewed here: http://pit.wpengine.com/private-forex-training





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