Have you ever wondered why most Forex traders lose money? Its simple….. Read on..
New Forex traders wanting to make quick money without first having developed the skills needed for Forex trading. Once you’ve decided that Forex trading is for you, you’ll have a greater chance to make successful trades in the long term, because you’ll develop the correct Forex skills.
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– 1 You have no extra money
Because the forex market can be volatile, there is always the risk of losing money when trading a currency pair. Losing FX trades over a long period of time means that your account balance can quickly fall to zero.
In addition to the main risk linked to FX trading, with Forex trading you need to add margin trading and leverage, which means that you can invest large amounts with little initial capital. Fundamental Forex Strategies to know.
So, this high level of risk means that you need to be sure that you do not use $$$ that you need to live on – always trade with money you can afford to lose!
– 2 You don’t know what you’re doing
Before even considering forex trading, you need to know the basics of the currency markets, what influences them, and how trading works.
Another important aspect is that you need to have a trading strategy that suits your trading style, with strict money management and risk management rules that govern how you allocate your funds to trade.
If you have no trading FX experience, and you do not know how the capital markets work and relate to each other, Forex trading might not be the right investment option for you – at least not yet.
– 3 You can’t handle when you’re losing
When making trading decisions, you can be right and make money, but there is also a high probability that you’ll be wrong and lose money. So many are using our Free WhatsApp Forex Signals and Free Telegram Forex Signals Service as a Trial.
– 4 You’re risk-averseFast changing capital market conditions, high volatility, and leverage can make FX trading a high risk.
You can make huge returns in the Forex market, but these kinds of returns do not come without risks, especially when using leverage.
So, if you can’t handle the idea of losing every dollar in your account, FX trading is not going to fit your targeted risk/reward.
– 5 You don’t have time
There are several trading strategies you can use when trading currencies, each requiring a certain amount of time in front of the markets.
Read: Why Trading Forex Part Time May Be the Best Option for You
Keep in mind that learning about trading, the Forex market and how to develop the right trading plan takes time. You’d better be sure you have time to dedicate to this activity before starting to invest in currency pairs.
– 1 You like the idea of trading forex at any time you want
The Forex Signals market is open around the clock, which allows you to trade whenever you want. It provides great flexibility for traders who want to trade part-time and as there are no market opening or market closing times the opportunity for potential profits is 24 hours per day.5 Days per week.
Forex trading can also be used if you want to buy as well as short-sell currencies. If you believe that in the short-term the EUR/USD is going to go down, then you’re able to make money from this downward movement thanks to short selling.
– 2 You like technical or fundamental analysis
Forex trading is often geared towards technical analysis, so if you have sound knowledge of price study, charting and technical patterns, Forex trading might be a good fit for you.
– 3 You can deal with a high risk environment
As the Forex market can be a volatile market, you’ll need to be able to tolerate a certain level of risk. To better protect your trading capital, it’s important to have a sound risk and money management system with rules to follow.
– 4 You are dedicated and patient enough to develop a trading plan and follow your investment method
Commitment, patience, and dedication are the most important ingredients in trading.
Having a trading plan to follow when trading is vital if you want to be successful, but most importantly you need to be committed to follow it, and patient to open/close your positions according to your set-ups.
You need to develop your investment strategy first, or trading system, before investing real money on the FX market – if not, how do you know what you’re doing, and that what you’re doing is making money?
A trading plan is a description of your investment method:
- Trading style: scalping, day trading, position trading
- Currency pairs: majors, minors, exotics
- Timeframes: 5 min chart, 15 min chart, 4h chart
- Size of your positions
- Set-ups to follow to enter/exit the market
- Risk and money management rules: risk/reward ratio, stop-loss and take-profit orders…