The Forex market has changed over the years. It has grown in trading volume and has expanded across multiple time zones.
Brokerage houses have also changed, moving online with sophisticated software and powerful servers.
Economic indicators and technical analysis have become more sophisticated too, until the Forex market of today bears little resemblance to what it used to be.
But there’s one thing that hasn’t changed, and that’s the fact that most traders lose money.
Despite all the advances in the Forex marketplace, the ratio of winners to losers remains low. Experts agree that only about 10% of traders make money, which means that approximately 90% of all traders lose money.
Experts also agree that the reason most traders lose is because they allow their emotions to cloud their judgment.
Most people trade on hope and fear, rather than facts. Rather than basing their trades on what the charts and the indicators actually say, these people trade on what they want them to say. They hang onto a losing trade and follow the graph down, hoping the currency pair will turn around. Or they exit a trade too soon, fearing the trend won’t last, and are satisfied with pennies that even the best Forex money management cannot balance against their losses.
Other people lose through greed, by trying to pick the highs and lows too nicely to maximize their profits to the penny. Rather than waiting to place a trade when the indicators confirm the market’s movement, they jump in too soon and are disappointed when the anticipated break-out never occurs.
Remember, there is no magic software or fool-proof trading scheme. If you cannot control your emotions, then you cannot become a winner despite yourself. But there are things you can do to improve your chances of being one of the winners, and the most powerful is to follow these rules of Forex trading:
Prepare a trading plan, using good Forex money management skills and the trading strategy of your choice, and then trade your plan. Don’t alter your plan or fudge your criteria if you don’t see a good trade for a few days, wait for the market to fulfill your requirements before risking your money. Remember the law of averages: sooner or later, the market will come around.
Use stops, and trailing stops when possible, to control losses and protect your profits. Remember to set your stops far enough away from the entry price so that you aren’t closed out by normal market jitters.
Paper trade (Practice trading) with a demo account until you are efficient and feel comfortable trading with real money in the market.
When you move on and start trading with real money, it feels different than paper trading! But this is no time to change your plan. To minimize the effects of emotion, set a small, realistic initial goal and trade until you achieve your goal more often than not. Use small sums in micro or mini accounts. Only when you are comfortable risking your hard earned money and sometimes losing it, should you attempt to trade with larger sums of money.
Study your trading records and try to figure out what went wrong when you lost. To put it simply, learn from your mistakes. That alone should put you ahead of the crowd.
5 Tips To Make Money Fast Trading In The Forex Markets – https://www.mastersofmoney.com/5tipstomakemoneyfasttradingintheforexmarkets/
Risk disclosure: *All investments involve risk. Before making any financial or investment decisions, we highly advise that you seek the advice of a properly licensed and trained investment professional.