It Ain't Easy to Earn Pips

But can you do this on a consistent basis, so that at the end of each day, your trading account balance is larger than you started with?

I can tell you right now that to earn pips on a consistent basis is no small feat. Not everyone can do it. The statistics prove my point. Anywhere from 80% to 95% of forex traders lose their money from trading. So why are so many forex traders losing money?

Here are two main reasons why:

1. Marketing Hype - Forex trading is supposed to be easy, right? Not really. You're only led to believe it's easy, usually by marketers of forex trading systems and products. They're simply trying to cash in on all the hype.

   Now I'm not saying that the entire forex industry is a scam. With over $3.2 trillion dollars in daily trading volume, that would be one huge piece of wool over our eyes if it were. It definitely is possible to make money from forex, but it won't be easy.

2. High Leverage - Forex marketers aren't the only ones promoting that forex trading is easy. Brokers are in on the hype as well. Hey, the more clients they sign up, the better! Brokers make it sound easy by offering clients high leverage.

   Leverage basically is your ability to control large amounts of money with little capital. The result is magnification of your return on investment, or ROI. Of course, brokers place the emphasis on increased earning power. What they downplay is that leverage also magnifies your losses.

   Leverage really is a double-edge sword. You can certainly win big with it, but you can just as easily lose big.

   Forex trading is not immune to the basic laws of investing...

   High Reward = High Risk

With so much hype behind how easy it is to earn pips and with brokers paving the way with their high leverage, many forex traders approach trading with an over-heightened sense of optimism. They buy into a scam product or system, simply taking the marketer's word that the system can make money.

It's only after the traders lose their hard-earned cash that they learn that to earn pips is not, in fact, easy. Hopefully, I can be your voice of reason before you make a similar mistake.

Success as a forex trader requires the same principles as with any endeavor. It takes a good amount of education; it takes a good amount of time gaining experience; and most of all, it takes a great deal of emotional discipline. This last requirement is where most traders have the most difficulty, including myself.

Education and experience can be acquired by almost anyone. However, the discipline to control your emotions, especially when your money is on the line, is extremely difficult to master. The emotions of fear and greed can cloud your judgement, affecting your trading decisions and your ability to earn pips on a consistent basis.

Over the years, I have gained a solid knowledge of the forex markets. I have also gained a lot of experience by trading manually. But the experience I've accrued has taught me an important lesson about myself...

...that I lack the emotional discipline to stick with my Trading Plan.

I'm prone to let fear and greed affect my trading decisions, leading me to abandon my trading rules. I end up trading on emotion, which 9 times out of 10 results in a dwindling account balance. That's why I now prefer using automated trading software to earn pips for me.

You can certainly gain the education and the experience with forex trading, but how well are you able to control your emotions? That's the real test of a successful trader.

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