The short answer to that burning question is: ‘Yes, you certainly can make money trading Forex’. But you didn’t come here just for the short answer, did you?
A more comprehensive answer would be: ‘Yes, it simply wouldn’t exist if people didn’t make money from it. That said, the percentage of people who make money is small and there are a number of reasons why’.
Better still, do you want to know what those reasons are? Well, lucky you, because we’ve summarized the most common traps beginners fall into that and how they can avoid them.
Starting with an insufficient amount of knowledge
A lot of beginners are interested in Forex trading for the wrong reasons. They falsely perceive Forex trading as a get rich scheme. An easy way to make money that requires minimal effort. Quite frankly, this a myth. If this is your perception of what Forex trading is, you are certainly not ready to start trading. Trading at this point will likely lead you down one of two roads. Either you’ll lose a considerable amount of money on bad trades or you’ll end up very disappointed by your lack of success and likely quit trading altogether. The first thing you should do is get a currency trading education. Without an education in Forex, how do you suppose to utilise any of that information?
Not understanding risk management
Only a small portion of retail Forex traders actually make a profit. Depending on where you look, a lot of retail traders lose money. Traders should know how much they are willing to lose on a trade. They need to set goals: when they should enter a trade; when to take profit; when to get out before things get worse. They should stick to these goals and shouldn’t change their plans at the last minute on the possibility of making more money if the market moves quicker than expected. Of course, the market may shoot up immediately after you take profit and you may miss out on a higher gain. But you need to accept this and move on.
Chasing losses
This is when a trader makes a loss and then tries to make the money back by making further trades, sometimes increasing in size. Why is this a horribly bad idea? Because these trades are motivated by a desperate feeling to regain what you lost instead of any insight into where the market might be going. Of course, it is very natural to react in this way. But the thing about trading is that it shouldn’t be reactive, it should be orchestrated with set goals, goals based on good research. The most successful Forex traders won’t waste their time in this way. Instead, they need to be able to accept their losses, learn from their mistakes, move on and then look to the next opportunity to make a profit.
Not having a plan
Traders who are highly organised and able to plan out their day and even their week tend to be more capable of avoiding risks and putting their emotions to one side. Having a plan also allows you to try new things and develop an effective strategy. Devising a strategy that works for your trading style is one of the most important things you can do. But a plan doesn’t just involve setting up your goals, as we mentioned above. It also means saving time to learn new things. Forex Market should be looked upon as a never-ending process. The minute you stop teaching yourself new things about the Forex market you are leaving yourself exposed to making mistakes.
Forex trading is a SKILL that takes TIME to learn. Skilled traders can and do make money in this field. However, like any other occupation or career, success doesn’t just happen overnight.
If you are looking to make real money through Forex Trading or have incurred a loss, Connect with me at:
Whatsapp: wa.me/918815110728
