When I first learned about the foreign exchange (forex) back in August 2005, I was so happy like a farmer just happened to dig up a treasure chest. The reason was that for years I tried to look for an opportunity where I could trade online using my personal computer. Although stocks market had been available online for a long time, it was not for low budget traders like me. Whereas retail forex trading opened its door to everyone with only a few hundred dollars to start. Besides, trading forex is a lot more exciting than trading stocks, mainly because you can see results in minutes, 24 hours a day for most of the week. But for stock trading, you'll probably have to wait for days, even weeks, to see any results on your picks.
But then, just like how happy I felt when I got profits, it was very depressing to accept losses. After all, it wasn't a game where I could just forget about it. It was real money, my hard-earned money that was taken away. So after losing a few hundred dollars, I put in another few, a bigger sum, in hope of winning back my losses. Only after I lost all the second deposit had I realized that I needed a lot of training before I can trade retail forex. Well, I waited a few months so that the moody feelings died down before I invested some money in forex coaching courses. Much to my surprise, I found out that there were no tricks or wisdom in forex trading. Various courses that cost me almost a thousand bucks only taught me how to read charts or what economic indicators mean. But none of them ever mentioned any possible strategy to predict price action.
So my big question at the time was, "What's the use of learning all the basics of how currency rates change without being able to predict their future?" In the end, the well-educated trader wouldn't be much different from an uneducated one, because they both toss a coin to enter a trade! And then the more I listened to the pros arguing, the more I got confused. There seems to be a war going on between those who believe in fundamental analyses and those who only trust technical analyses. The fundamental guys usually label technical guys as "nonsense." The mocking line is something like "if you toss enough shit in the air... (eventually some will drop on your head!)" In other words, technical analyses are completely guess-work, because the future has no reason to repeat the past.
Well, the technical guys do fight back. Every now and then market reacts differently from economic news, even opposite to the way rates are supposed to move. When that happens, technical guys will rejoice "See, fundamental analyses are garbage!" Anyway, what does that leave me? Nothing! After spending thousands of dollars on courses, I felt like getting back to the beginning point, just tossing a coin to enter a trade. But here's a dilemma: I couldn't quit just because I already invested too much into it! If I called it quit, not only I never had a chance to get back my money, but I would also feel like a sore loser. So there I was, back and forth with forex trading, "win some lose some," but never got anywhere. And because my losses were bigger than gains, the feelings of guilt kept haunting me even in my sleep. So, one year later, I realized that my beautiful dreams of trading forex just practically turned into real nightmares.
Rudy has been trading forex since August 2005 with numerous brokers, forex coaching programs and forex software packages. Visit http://www.ForexBuddha.com for more details
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By Rudy Freeman
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