Lets look at some of them.
"Resist the allure of diversification"
Diversify your investments is accepted as a way to make money longer term and reduce risk - but all it does is dilute profits. You will read about risking 2% per trade and spreading your trades around - but if you are like most Forex traders and trading a small account of around $2,000 you wont make much money risking $40.00!
The Zurich Axioms encourage you NOT to diversify.
Look for the big potential winners and risk more. This does not mean you are being rash, you are simply risking more on the high odds trades and ignoring marginal trades - many traders simply trade too much.
In currency trading you dont get paid for how much effort you put in or the amount of trades you make - you get your reward for being RIGHT with your trading signal.
The Pareto Principle - 80 / 20 Rule
The above philosophy of trading less is related to famous the 80 / 20 rule or Pareto principle. The rule states that 80% of your results come from 20% of your activities.
This is true in many areas of life in sales, business and trading.
The rule postulates that by concentrating on the best investments, and ignoring the others, you can improve your profitability.
By only focusing on a smaller number of good trades.
This is really a common sense rule, yet very few Forex traders think about or practice this rule. Most Forex traders are obsessed with trading - they think if their not in the market they will miss a move. Other traders try trading in ways that simply offer them no chance of success like Forex day trading or scalping. I know traders that make triple digit annual gains and only trade once every few months and I know other traders who trade every day and lose.
Keep in mind - the aim of Forex trading is to make money - nothing more.
Love Risk!
The major reason traders dont win is they are frightened of risk.
Does this mean you should act in a rashly or in cavalier manner?
No it doesnt:
However - to make big gains you have to take calculated risks when the time is right and a good trade presents itself and load it up with a meaningful amount of money.
In the Zurich Axioms Gunther states:
"Worry is not a sickness but a sign of health...If you are not worried, you are not risking enough" and "Always play for meaningful stakes. If an amount is so small that its loss wont make any significant difference, then it isnt likely to bring any significant gains either".
If you want to make money fast in forex trading then you need to risk meaningful amounts on the right trades at the right time.
So if you want to make money fast seek out the high odds trades and load them up with as much as you can afford and aim for and achieve higher returns
by Kelly Price
