Hi Guys and girls,
Sorry for the title, I had to draw some attention…
After a long time I returned to Babypips and I have been back for a couple of weeks. I enjoy reading all the posts and the sometimes passionate discussions.
In the last weeks one question popped in my mind frequently and I’d like to share it with you to gain your opinions.
Against all better judgement I ask my self: Is Forex really a high risk investment?!
Hold on, hold on… I am sure I know your initial reaction, but in all honesty. Is it that risky, or did I became a hard knuckeled forex dealer in the last years, blinded by my own self confidence?
I just like to have your opinions, because I have some troubles with the common advises in the FX-world, like:
- Never risk more than 2% of your equity.
- 95% will fail.
- Brokers will take most of your money and cannot be relied up on.
- The market works against me and pips are stolen during news events.
- …
I don’t experience it in that way and I don’t consider myself reckless. I have a very risk orientated background and I learned to manage risks. My brains would go in a meltdown if I would do something that is too risky. So why isn’t it triggered by the FX-trading?
If we are so afraid of the things that can go wrong (and we forget that we already manage those risks) isn’t that the wrong attitude to enter the market? Would that not make us the nervous first term soldier that make rookie mistakes because he is scared of everything?
I think that we are even better than most of the big bank traders, at least the better than the traders I have met at the banks I worked for. I was surprised by their lack of knowledge and recklessness and my performance on eurusd was a lot better than most of them, but they just had more money.
Actually, do you know that most 90’s bank traders that went to trade for themselves busted their accounts? They were used to trade money from others and now they had to trade their own. They experienced that that required a whole different attitude which they had to acquire. We already working on that. Our own money is on the line and in my opinion that gives us one extra step ahead in the game. But we don’t read articles from retailtraders and their experience, no we read about those bank traders and the people around them. Would it make sense than to rely on their opinion alone?
I think yesterday I was given a link to an article about when to quite your job. I read it and I saw all cliches passing by and was actually happy to have reached the end of it. You probably experienceing that now, but I appreciate it if you stick to reading this… Than I read something about the author! It was not even a trader, but a journalist that interviewed traders! He probably heared all the cliches we traders tell because we don’t want to sound like we don’t know our stuff and he just translate that as true traders knowledge and we pick that up again.
I am almost certain that there are more of us that don’t believe in the 2% rule, but you hear it so often that you repeat it. Just like saying ‘Goodmorning’ back to a person because you don’t want to be seen as a jerk. Well let me come out of the closet: I am a jerk as I trade 20% of my equity on each trade and I am 100:1 leveraged and I feel comfortable with it and it brought me good things in return!!! But I have to closely manage my trades, which I do, to manage the risks involved.
Anyway, it is less structured than intended, but these are my thoughts and I honestly like to hear your thoughts if you want to share these with me. Aren’t we missleading ourselves with the bias we are having, we are skilled and experienced!
Happy trading!