A few years ago, I began my journey into the forex market. Like an athlete preparing for a sprint event at the Olympics, I was determined to overcome all hurdles and become a renowned forex trader with an equity of over $2M within two years. However, between when I started and now, I have learned countless lessons. In this article on the real struggles of forex traders, I will share some insights from my over 10 years of struggles in the forex market.
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Table of Contents
The Beginning: The Real Struggles of Forex Traders
Two things define every forex trader – profit and lose; for some forex traders, small quick profit can lead to over confidence and greed, while lose can lead to lack of confidence and fear
Every successful or struggling forex trader started somewhere, either as:
- A self-taught trader – learning from online materials and videos.
- A wanderer – gambling in the market with hopes of becoming an instant billionaire.
- A believer in mentorship or academies – learning through mentors or trading academy.
How My Journey Began
In 2010, I came across a story about a young trader who flipped a $200 account into $10,000 in two days trading XAUSD. Inspired, I decided to explore the forex market. Armed with a basic understanding of “buy low, sell high,” I opened a demo account to test the strategy.
Trading on a demo account was fun, and the strategy worked well—until I decided to fund a real account with $200. Having a real account is where the real struggle of forex traders begins.
Taking risk is a wonderful adventure, it can bring great fortune, but it can also become a pathway to failure
An hour after funding my account, I placed my first trade on XAUSD—the same pair the young trader had used to grow his account. My first trade was a success, yielding a $42 profit after 50 minutes. It felt good, but that was when overconfidence and greed crept in.
Confidence is essential, but overconfidence can breed pride—and pride, as they say, comes before a fall.
Although my father had taught me about contentment, the thought of making a fortune on my first trading day overshadowed his lessons. I went all in on my second trade, leveraging my account to its limit. While my prediction was correct, I was forced out of the trade due to a margin call.
“Who the heck is margin call?” I sat in my room staring at my phone, hoping the market would somehow return half of my money. I was sad, hungry, angry, and deeply disappointed.
In understanding the real struggles of Forex traders, I started as a wanderer, then a self taught trader, before attempting the mentorship journey.
Then the Real Struggles Began
Losses in the forex market can lead to fear of entering trades and a lack of confidence in yourself and your analysis.
Fear and self-doubt became my closest companions, and frustration almost joined the party. But constant demo trading and studying helped me overcome these hurdles. After three months of re-testing the buy-low-sell-high strategy, I funded my account again. However, the overconfidence I had on my first day was gone, replaced by hesitancy and self-doubt.
To combat this, I joined a signal group—forexsignals.com—led by Andrew Lockwood. While the community shared daily trade setups and insights, I quickly learned that without a solid understanding of the basics, signal groups alone cannot guarantee success.
For example, I once placed a trade on GBPNZD from the group’s setup. While others profited, I lost my entire $40 account because the stop loss for the trade was $50—more than my equity. That was the only trade I took from the group, and I didn’t renew my subscription.
What is the first thought that comes to your mind when you wake up to see red in your account, is it what am I doing wrong? Or I will get them next time?
What was I doing wrong? This question tormented me for months. So, I turned to the School of Pipsology , completed all the courses on the platform, and funded my account again. However, before I started trading, I met Michael Essien, a colleague from school who had become a great brother and friend. Michael introduced me to a broker whose assets could be traded 24/7, including weekends. Since we lived on the same street, we occasionally met up to share ideas and study the charts together.
One thing I learned from Michael was the importance of staying on the chart. Michael was excellent at chart analysis. For instance, if he spotted any reaction on the chart, he would scroll through the historical data to understand the market’s behavior before making a decision. Before long, Enwongo and AniedieAbasi joined us, and the group kept growing.
“Master Trading Hack” a new course by Michael Essien is on Selar, please click this link to buy the course and join his growing community of trader,
Lessons From the Journey
Here are some key struggles that define the real struggles of forex traders beyond the charts:
Struggle 1: Can Loneliness Be an Asset?
Loneliness is common among traders. Reflecting on trades and strategies often requires isolation, which can pull traders away from personal relationships and social activities.
As a beginner, don’t trade alone. Find or form a community of like-minded individuals to share setups, lessons, and experiences.
I recently met an investigative journalist who believes that 75% of forex traders are lonely. While I didn’t argue with his submission, I believe that it is not completely true. Of course, as traders, we all have our lonely moments. Beyond the chart, it can be sitting back to reflect on our trades or progress at the end of every trading day. It can also be trying to redefine a strategy after days of losses. In fact, the desire to improve and win in the market alone can consume time and may pull traders away from personal relationships and social activities.
In 2022, one of my mentors was off social media for almost six months. His numbers were not going through, so one day, I decided to visit him. I had been to his apartment in Abuja once, but I wasn’t sure I would be able to locate it again.
Luckily, my cabman was able to find his apartment (since he was the one who had taken me there on my first visit). We met him in front of his laptop coding. He was working on his trading robot.
“Abel, if I succeed in what I’m doing, it will add more value to our trading life,” he said.
I could see the desire in his eyes, the passion to help traders overcome the bane of emotions by presenting them with his trading robot. From the test results he showed me, the robot was achieving an average of 35% monthly without any significant drawdown.
Struggle 2: Facing Pressure
One of the the real struggles of forex traders is pressure. Pressure often stems from expectations—whether self-imposed, familial, or societal. Unrealistic expectations can lead to hasty decisions and over-trading.
I had a friend who wanted to establish a forex fund management firm in Ibadan. His goal was to pool money from a few of his friends, trade in one account, and then share the profit with them weekly. He invited me to Ibadan for a knowledge-sharing session with him. During the session, I advised him to put his plans on hold until he was able to understand trading psychology. Why did I say so? He was just starting out, he didn’t have much experience in the market, but he ignored my advice. He raised about $4,500 from his friends and started trading.
In the first week, he shared his trading history with me. From the history, I noticed that he had flipped the $4,500 account to about $9,748 within a week. So, I advised him to withdraw $4,500 and trade with the profit. However, he informed me that he had discussed it with his friends, and they were targeting a $100,000 profit in the first month.
When it comes to expectations, there is a stage called contentment. Contentment is like a refining process—you need to subject your expectations to this stage, especially in the forex market, to overcome greed.
Their expectations suddenly grew from a target of 50% monthly profit to over 10,000% profit. So, I advised him to get a lawyer to draft a risk disclaimer agreement for them to sign. Reluctantly, he agreed. A few days later, he lost the account and was almost arrested by his friends, who claimed that he had defrauded them. The only thing that saved him was the risk disclaimer agreement.
Lesson:
Trading under pressure often leads to over-trading. I know that pressure is inevitable, but how you handle it is essential to your growth. Here’s what to do:
- Set realistic expectations.
- Have a solid trading plan.
- Trade only with money you can afford to lose.
- Have a trading journal.
- Know when to take a break. There’s so much money in the market, so don’t aim to make it all in one day.
Struggle 3: Handling Losses
One of the real struggles of forex traders is handling losses. From my experience, losses sometimes raise the issues of fear and self-doubt. Handling self-doubt can be overwhelming, especially for new and struggling traders.
I recently visited one of the top forex traders in Nigeria at his Lagos residence. While I was at his place, he made a trade call on his community platform for an XAUSD buy. Unfortunately, the trade hit the stop loss, and he lost about $7,500.
His reaction was somehow very comforting. He shared a voice note on his platform informing his community members that he was going to review the trade setup with them to see what went wrong, then advised those who had reached their risk tolerance limit for the day to stop trading.
After a few minutes, he shared another trade setup on GBPUSD and was able to recover his losses.
Lesson:
One thing I have learned over the years is to focus on the strategy, not the immediate outcome. I remember, during one of my early conversations with Michael Essien, we were working on a price action strategy with a touch of RSI. In trying to implement the strategy, we encountered some losses, but Michael was adamant. According to him, “It is very important to have a strategy that suits your trading style, risk tolerance level, and can help you stay in the market for the long term.”
When I look back, I realize that success in anything is about long-term consistency, not short-term gains, and losses are part of the game. To be truthful, there is no strategy that guarantees 100% success. So, when you lose, sit back, relax, and review your strategy (trading and risk management).
Struggle 4: Information Overload
One of the most important points in this article about the real struggles of forex traders is information overload. There are thousands of forex strategies and millions of forex mentors worldwide, so filtering through these strategies and finding a good mentor can be very challenging. Because of this, many traders are forced to go through cycles of trial and error.
In my forex trading journey, I have encountered many scam forex mentors, some with many promises of having a Holy Grail strategy that can transform one’s forex journey.
Lessons:
Just one strategy is enough. The earlier you understand this, the better for you. Forex is still the “buy low, sell high” game, but you need to define your own version of “buy low, sell high” that will fit your trading style and risk tolerance level.
Secondly, when finding a mentor, look at their free content, review their track record, and reach out to past students in their free Telegram or Discord channel. Most importantly, find a mentor whom you can easily meet for face-to-face knowledge-sharing sessions.
Struggle 5: Balancing Trading Life and Relationship Life
Spending more time on trading can have a serious impact on your relationship, especially if your trading results are not good.
The investigative journalist I mentioned in Struggle 1 shared his conclusion on balancing trading life and relationship life. According to him, “A poor run of results is one of the reasons most forex traders lose their relationships.”
Lesson:
Try to find a balance between the two. Your love life is also important, as it can act as emotional support throughout your trading journey. Don’t be a trading guru and forget about your love life.
Final Thoughts on the Real Struggles of Forex Traders
Trading forex is a journey filled with ups and downs. Beyond the charts, traders face struggles like loneliness, pressure, and balancing life and trading. However, with the right mindset, strategies, and support systems, these struggles can be overcome, paving the way for success in the market.
Risk Disclaimer
Deriv offers complex derivatives, such as options and contracts for difference (“CFDs”). These products may not be suitable for all clients, and trading them puts you at risk. Please make sure that you understand the following risks before trading Deriv products: a) you may lose some or all of the money you invest in the trade, b) if your trade involves currency conversion, exchange rates will affect your profit and loss. You should never trade with borrowed money or with money that you cannot afford to lose.