Forex trading is a tough, difficult activity and not suitable for everyone. With trading you can not get easy money. All Forex traders lose money when they trade. Only a small number of them are able to offset the inevitable losses with profitable trades. Specifically, 95% of forex traders lose money and in a short time they are kicked out of the market. This is mainly due to lack of trade planning, insufficient market knowledge, poor money management and risk management. Also the personal character affects the results. If you hate losing or are very perfectionistic, you will probably find it very difficult to adjust to forex trading. If you don’t learn to control your emotions and if you don’t have discipline, you can’t be successful.
Forex trading is not for the unemployed or those with little income. You must have at least $10,000 of trading capital (in a mini account) that you can afford to lose. Don’t expect to open an account with a few hundred dollars and become a billionaire.
Forex is one of the most popular markets for speculation around the world, as it is a huge, liquid market and currencies have the characteristic of moving in trends. Most people invest in the Forex market with the false hope of making a lot of money, but in reality they lack the most important asset to trade: discipline. Trading, especially short-term trading, is not for amateurs and is rarely a get-rich-quick way. Forex trading is not a get rich quick scheme. Trading Forex is a skill that is learned over time, with effort and suffering. Also expert traders are subject to losing periods. There are no shortcuts, it takes a lot of time to become familiar with Forex trading.
The path that will lead you to success is hard work. It is advisable to practice working with a demo account. You have to trade with virtual money in the same way as with real money. There is no point in opening a demo account with $50,000 if you can then actually open a real account with only $5,000. It is correct to put in the demo account the same money that you could put in a real account. Do not open a live account until you are trading profitably on a demo account (this may take many months).
It is advisable to invest in a single currency pair. Major pairs are the most liquid and therefore the spread is smaller. When you start trading, it is too complicated to follow more than one currency pair. To be successful in the forex market, as in all other aspects of life, it takes hard work, dedication, a little luck, a lot of common sense and judgement.
Before you start investing in Forex, you should carefully consider your investment purpose, level of experience and risk tolerance. The most important thing is not to invest money that you cannot afford to lose. There is considerable exposure to risk in any trade. The market is open 24 hours a day, 5 days a week. This means that unexpected events can affect your investment while you sleep.
The most attractive aspect of forex trading is the high degree of leverage used. Leverage seems to be very attractive for those who want to turn a small amount of money into a large amount, in a short time. High leverage refers to the speed with which an account earns or loses money. You cannot expect extraordinary profits without taking extraordinary risks. Leverage should be increased gradually with increasing profits on your account.
There are also other additional risks that affect investing in Forex. For example, loss of internet connection, computer or server malfunction, software update failure, inappropriate use of business tools. A prudent investor must be prepared for unforeseen contingencies. Also, beginners should always improve the quality of their trading, starting with a trial period on demo, followed by a period with a mini account, and then switch to a real account if all tests conclude as planned.