Profit Vs Consistency in FX Market.

When I flip out newspaper advertisement column on FX seminar and read some very catchy words; 'Making USD50K in 1 month, Turn my account from USD10K to USD71K and the list go on..." I wonder why all the gurus still conduct seminar if they have incredible skills to make money in Forex market. I would say they are better then Soros, most of you know Soros never claimed himself as one of the greatest speculators.

Anyway, are the so called gurus making false statement? I don't know. When you really want to become a FX trader, you must ask yourself what you want. Of course, everyone will give me same answer, that's "making money". I would said "Making money consistently".

To make money consistently in FX market is not an easy task. As written in my previous articles, we are human with emotion attached on it. In fact the whole market movement is driven by emotion and perception. Some new traders can make money as advertised in the newspaper for a while, they will lose back once they are over confidence.

Another group will make money consistently but with a smaller return. This group is a bit sceptical, they tend to believe market is always right. Once they make mistake, they will get out quickly to avoid larger damage. They wont feel they miss the train as they know there is always the next train available to the party. As for me, I make money consistently in every 3 months for my clients. I admit some months like December and October are the volatile months. Volume in December is too thin where as Octorber always consider as the "Bull fight Bear" market. In this particular months, I always remind myself to be careful in the market.

Of course, Soros said before "Market is always wrong." If you have the power like him, you can say so. As I mentioned in my Forex party article, if you are big enough, you can be the deejay of the party and choose the music you like. However, with the size of transaction in FX market today, it is unlikely a single person can manipulate the market. But if you have FX good friends on your side, that is another different story.

Do you need good friends in FX market?

Read the title carefully. Do you need good friends in FX market? Yes! Definitely yes! But sadly, only when you are big enough, you have the chance to approach the "FX good friends".Who are them? Ok, let me make a list here.

1. Uncle Ben 2. Mr. Mervyn King 3.Mr Jean-Claude Trichet. 4.Masaaki Shirakawa Son. If you look at Forex market, it is like a Mafia Games. Those who ignore the rules and gangs, will be eliminated. Media is the good friend of this group. They use it as a channel to attract the 'victims' and 'kill' them easily.

Still not believe? Ok, let me show you some information to prove my views. Before cable drop 4 cents yesterday, everything publish in the financial media is positive about UK economy recovery. Mr. King personally addressed these issues. The amateur players bought GBP/USD as much as possible. Big boys with good friends sell the GBP quietly via their black boxes. Once they finish selling, the pound dropped the most since April versus the dollar yesterday and traded at its lowest in more than five months against the euro after Bank of England Governor Mervyn King said the currency’s weakness was “very helpful” to the U.K. economy.

Do I trade based on news? I think most of the successful traders which do not have the good friends above will switch off Bloomberg or CNBC from Monday to Friday. I read financial news during the weekend while I am enjoying my Caffe Mocha at Starbucks. From Monday to Friday, if I switch on TV, I will watch History, Discovery Channel and National Geography.

Forex: The Emotion Game.

The USD is heading for year low while I am writing this article. The long term speculator must be smiling watching their investment value double or triple in less than 1 year.
Currency market / FX is a gold mine for those who know the game well. As you are growing bigger, the chances for you to play long term strategy is increasing. The power is in your hand once you have bigger capital. The opportunity is always waiting for you to make money. Some of my friend want me to shares the secret of making money in FX. I gently reply them " If you have USD500K in the bank, I advise you take out USD100K for Forex and I will guarantee make money for you in less than 1 year." Most of them open the eyes and look at me. I smile back to them and reply "I know what you are thinking, let me explain how....", I continue "Are you looking for 3% per month, 5% per month or 100% in 3 months? (which is my best record...). Their eyes open bigger.
I show them the chart and start explain one of the methods I use. I also let them know the rules of thumbs in any investment, the higher the return, it come with higher risk. After my explanation, they agree with me but ask me why so many people lose money in Forex. I answer: "Simple, forex market is a game of emotion!" If you take out your emotion, you can clearly look at the big picture.
Anyway, Forex is not the game for those who are too greedy and treat it like casino. I also advise my clients don't open the trading account every week even I give permission them to do that. The more you look at your account, the more it will affect your emotion. Believe it or not, power of attraction is another element affectimg trader psychology. I also set rules for them to follow or else I won't accept them as my clients.

Cash is King! Forex Market is the Kingdom of Cash!

Beside being a Forex Trader, I am also a die hard entrepreneur. In my past experience, I always want to leverage on other assets such as human capital, properties to convert into more cash. I made a big mistake. In business and financial world. My belief is starting to change, (I hope it is not too late :)
Now, everything I do is to generate CASH, I believe Cash Is King and Forex Market is the Kingdom  full of Cash! Trillion of dollars is translated in the Forex market each day.
In business, no matter in the good or bad time, you need cash. In the good time, if you have cash you can generate more cash. In the bad time, you need more cash to sustain your business and if you have extra cash, you have the strongest bargaining power. Tycoons with cash in hand always like to use this phrase in their dealing."Take it or Leave it".
If Cash is King, where is the kingdom of cash? For me, the kingdom of cash is Forex Market, when you step in Forex Market, you are meeting millions of participants. All of them come into the kingdom for one purpose; to make more cash! Sadly, 90% of them come out of the Kingdom lose their cash. 10% of them stay in the Kingdom for a long period of time and hoping more participants will come in. Of course, more and more participants will come in each day to try thier luck. 10% of the participants will be smiling to welcome 90% of participants. We know the dinner is ready.

Create Passive Income with Forex Investment.

I think most of you feel uncomfortable with the article's title. Many investors view Forex is a high risk investment rather than other that  can create passive income such as property investment. In any investment games, if you don't know the rules and trick of the games, I consider it as high risk. Most of the investors think property is a safe investment until the recent sub prime meltdown hit the whole world economic.
Let go back to Forex games. I mentioned earlier that Forex Leverage is a double edged sword which either can 'kill' you or you can use it to 'kill' other participants. Bare on mind, Forex  is a Zero sum games, which mean if someone win, other site someone will lose.
Why I can use trading Forex as my passive income. Firstly, I know the basic rules of this game. Then, I apply hedging in my trading strategy. Rules and strategies are totally two different variable. Without knowing basic rules, you will 'die' in the games. After knowing the basic rules, you must have your own strategies, different participants have their own styles in trading Forex. I prefer 'relaxing' style by applying 'hedge' in my positions. Did I make loses in my positions? Yes, of course I did. When you view my track records, some even shock when they see I cut big losses. But when they see the bottom line over a period of 3 months, they feel comfortable to place their money with me.
Can Forex create passive income for you? Yes, as long as you know the how to play the game, every investment tools can create passive income. The magic of the Forex game is you can get a 'big bonus' if the opportunties come. You must focus and stay calm when the opportunities come. It will appear at least 3-4 times per month if you follow the FX market closely.