When Should You Give Up on Forex Trading?

Monday, July 9, 2012
It’s not a pleasant subject, but it’s one that comes up often among Forex traders — when is it time to quit? The fact is that this is a field in which many people try, but few actually succeed. The failure rate among Forex traders is estimated to be higher than 95 percent (possibly even higher than that). Considering that, the odds are weighted heavily against you. The foreign exchange market is a tough place to cut it, and not only that, but trading can have an addicting effect on many people. There is a strong element of chance which is always present when you trade currencies, and so for many people who have lost a lot, it becomes a gamble to try and get back on top. Many people trade for years and years without becoming profitable. When do you call it quits and move on with your life?

This is actually a two-dimensional question that doesn’t take into account a lot of factors that play in your favor — the biggest one being the ability to demo test without investing a dime of your own money. When is it time to quit trading live? If you aren’t consistently profitable, and your wins and losses are both the result of chance, or your system isn’t working, it’s definitely time to quit trading with real money, but it’s not necessarily time to quit trading FX altogether. If trading is taking over your whole life, it’s time to take a break from trading live as well-and maybe even a break from demo testing, at least until you get your life in order. This is true even if you are profitable.

It’s important to realize that even people who are good at Forex and successful at it usually take years to get to that point. Those years are generally full of pitfalls and failures on the way to success. So if you’ve been struggling, it could mean Forex isn’t for you, but it could very well mean the opposite. You could just be struggling along the road to success and profitability. You shouldn’t be investing real money if you aren’t doing well, however, not when you can trade with virtual money for as long as you want or need. Take the pressure off your finances, learn responsibility and patience, and demo test until you are profitable if you still think FX is for you. It’ll pay off hugely in the long run. In other words, don’t cut yourself out of the running too soon — try and figure out if trading really isn’t for you or if you’re just going through a rough patch before you give up.

Anything, even profitable currency trading, can become addictive (most people have met at least one workaholic in their lives). It’s important that whether you have real money on the line or not, and regardless of whether you’re winning or losing, you learn to maintain a proper balance between trading and other activities in your life. Lead a full, rich life, and you’ll be far more likely to cultivate the right attitude for success in the market and in your other pursuits.