Forex trading is a speculative business which requires one to take calculated risk. The reason most people are unsuccessful is because they lack control of their emotions. It is a market that works based on human psychology. Humans are naturally greedy and this market is designed to take money away from the greedy folks. If you can control your emotions by practicing solid money management practices, then you will smile to the bank every month.

There is no business thats 100% fail proof. In fact, there's is statistics that most business fail within the first 5yrs - why? Because most of the owners lack proper knowledge about it.

Every business has its associated risk, forex inclusive. The moment you understand how to manage this, you are good to go. Cheers guys, love you.

"Most people who attempt trading indeed lose money. When I worked at a proprietary trading firm people were regularly brought in for training, provided with capital to trade, and on the whole 96% of them washed out, usually within several months. The profitable traders easily made up for all the losses of this much bigger losing group." - Cory Mitchell

Trading, like a sport, is a hierarchy. There are a few traders who make loads of money at the top, then there are people who make a lot, then people who make a living, people who make a little, people who break-even, people who lose, people who lose a lot and people who lose everything.

To be profitable, you need to climb above and be better than those breaking even. How high you climb is up to you. But because it is a hierarchy, not everyone can win. You need to be better than most traders out there, on average, to make money.

Think of trading like golf (or any sport), and being able to make money at it. Millions of people play golf, but only a few thousand, male and female, make good money playing on major tours around the world in any given year. Only a small subset of this make the really big money. Then there are many thousands who make a living playing on smaller tours, being pros at local golf clubs and driving ranges, and doing trick shots or long drive competitions. Then you have a bunch of part-time golfers who are really good and make some money off their friends and/or win scholarships. Then there are millions of others who just golf, and they range from horrible to good…but the golfers above are higher on the food chain. Trading works the same way. To make money at it, we need to work our way up the ladder. We need to better than most people out there…and we need to stay there. Sometimes we are brilliant on one trade, and make money, but unless we stay better, we start losing again. Golfers who were good, but are no longer good, don’t get to keep playing at the top level. We have to perform to stay there. Trading is the same way. We need to work our way up, be better than others in order to make money, and then we need to maintain that. If others get better on average, we need to get better as well, or we will lose ground. Successful trading is not a destination where we get to relax once we get there. We have to continually practice and train ourselves to maintain that level.

If we start lacking discipline or patience or focus, others will overtake and push us down the food chain—we make less money or start losing. Just like any sport, we aren’t going to consistently make money at trading unless we are better than most of the people we are playing against.

Most traders will lose or make very little, in order to “pay” the profitable traders.

If a professional trader made $1 million last year, potentially thousands of small traders lost money or gave up profits to feed the pro’s profits. Other pros contributed to the gain as well, but on the whole, the other pros made more than they lost too. Think of a poker tournament with thousands of people. Most players will win some hands, and even the pros may lose a pot to a weak player every now again, but on the whole, the money slowly shifts to the stronger players. The money the strong players make has to come from somewhere, and it comes from weaker players. Weaker players will continue to give money to the stronger players in tournaments, until on the whole, the weaker player eventually (if ever) becomes better than most, and starts making more than they buy-in for. Trading is the same thing. Every trade we take provides an opportunity for ourselves and someone else. Poor decisions over many trades mean our money goes to people making better decisions (better strategies, better execution, etc). Good decisions mean more money flows to us because we took advantage of the opportunities other traders provided us with their trades/orders.

Profits are created when someone else loses money OR gives up profit. This means that you need to be better, on average, than other market participants, as discussed in the hierarchy above.

If you buy shares and make money, someone else sold you their shares allowing you to profit…they gave up that money to you. Without someone sacrificing those shares you never get the chance to profit. On the exit, you need someone to be there to sell to. Maybe you allow them to profit, or maybe you hand them a steaming bag of crap and they lose. Either way, on the way in and out, someone allowed you to profit or lose. And you allow others to profit or lose with your transactions. The person who does this better, over many trades, is profitable. The person on the losing side of more of these exchanges loses.

Not everyone can win. When you buy, others need to come in after you and be willing to pay higher prices for you to profit. This plays out on all time frames. If you buy and no one comes in after or the sellers are stronger and are willing to sell at lower prices, the price moves against you and you face a loss. Prices don’t move on their own. Buyers and sellers (individuals) push prices, creating losses and profits for those involved, and opportunities to win or lose for those about to get involved. For traders to profit they need to be better at capitalizing on those opportunities than others.

"Pros regularly have losses, just like losing traders, but on average pros make better decisions. The pro held a little longer, squeezing out more profit, not allowing another trader into the position (had the pro sold, someone else would have had the opportunity to profit). Or the pro sold quickly, cut their loss, and handed off a weak trade to someone else. The pro grabs the last few shares as the price starts rising out of a pullback (on average, if that’s their strategy). Anyone buying after them gets in at a worse price and has slightly less profit potential. Since there are pros with all types of strategies for whatever the price does, there are pros everywhere beating less-experienced traders to the punch in terms of getting shares when things look good and using less experienced trader’s orders to get out when the tides turn.” - Cory Mitchell.

(Source: Trade2win)