What is the hoo-ha with forex trading?
The debate on automated forex trading vs manual trading has raged on for decades. Both camps have built up in forces over the decades, with neither side willing to budge. What people really want to know is this, “Which forex trading system makes you more money?”
What differentiates a successful trader from an unsuccessful one lies not in the forex trading system, nor the amount of capital one starts off with, but mental factors and discipline. A successful manual forex trader trades by his system religiously, even when the going gets tough. He knows that there is nothing to change in his system, for in the long run he will surely be profitable because he has tested and fine-tuned his system.
On the other hand, when a trader suffers a loss, there is a very high tendency to lose confidence in his forex trading system. This is especially so when the trader lacks the patience and confidence needed to “perfect” his system, and he starts trading based on emotions and not with his mind. This is called emotional trading. Emotional trading is what every trader MUST AVOID at all cost. The consequences are as disastrous as cheating on your wife. All it takes is one moment of folly of not cutting losses early, letting them pile up, and the next thing you realise your account is wiped out. Most forex traders, no matter how experienced, have been burnt like this at least once in their lifetime.
What an automated forex trading system does is precisely to remove this factor of emotions, and to take away the hassle of having to monitor your trades constantly all day long. But some people just don’t trust their money being in the hands of an automated forex trading system. This is understandable.
The fact is, many of these systems are back-tested and tested live to be highly profitable. Many large global investment companies use these systems to great success, even in times of economic turmoil. The key here is to be able to filter out these highly profitable automated forex trading systems among the many scams out there.
Once you get your hands on one of these gems, your financial freedom is set.
Charles Lum is an avid forex trader who enjoys a cup of iced lemon tea every now and then. Visit his site today at http://www.fapforex.wordpress.com to become a highly competent trader FAST in the field of forex trading.