Why do people fail in currency trading? Learning Forex
The answer to the perennial question whether you can learn Forex trading without losing your money is manifold. To begin with (on a much gloomy note), it seldom happens that someone learns Forex Trading without losing their money. It is estimated that over 90 percent of novice forex traders lose their money and eventually end up quitting. Now, it isn’t all doom and gloom, there are those for whom this has emerged to be quite a lucrative proposition. It is solely the newer generation of traders that faces challenges in establishing themselves in the market of forex trade.
If you aspire to gain ground in the forex domain and make it to the elite league of the elusive forex winners, then you need to know what precisely is it that keeps you from making it big in this aggressive market.
Most of us (forex traders/currency traders), quite naturally, would commence by looking for avenues to make quick cash (passive) or perhaps to get rid of a long standing debt. Now, normally it is the forex marketers who convince you into believing that you could spawn considerably huge returns with a comparatively minor investment by trading enormous lot sizes with soaring leverage.
It remains a hard fact that money is required for its own multiplication (just stated the obvious for you to grasp). The higher the amount the better it is. In a short term certainly it is possible to get exemplary returns on a sparse capital, but risk involved is far greater due to the high leverage with which you would have been trading; rendering you psychologically vulnerable taking away whatever little capacity you had initially to take a market fluctuation audaciously. The only way, in my opinion to eliminate this bit of hiccup, is by avoiding trading with scanty capital investment. If that isn’t a practice you diligently are indulging in, then you are quite simply summoning an impending disaster.
If you aspire to be the Bear Grylls of the Forex Trade Jungle, then be sane enough to be able to meticulously manage the risks involved prior treading on inimical grounds or risk being mauled by a pack of ‘Wall Street Wolves’ or perhaps being trampled by a heard of ‘Dalal Street Bulls,’ metaphorically (see what I did there?). Whichever occurs, you are as good as dead. In addition to that, you may even end up losing your earlier held essentials imperative for your survival and hence, your existence altogether.
On a much serious note, it is of primal significance that utmost caution is practiced with the resources that you enter the market with because the exhaustion of your vital resources leads to the consequential loss of your ability to make gains in the long run. Therefore, it becomes absolutely necessary to mitigate potential threats to your financials and then think about making a profit.
What is it then that you could perhaps do to countervail the dangers in such a catastrophic scenario? Simple, set Stop-loss orders and move them only and only when you have made a decent profit; and be sure to utilize lot sizes wisely.
Forex trading can be profitable, only when the investments are made judiciously.
Author -Prakash Sharma