If you’re losing money in Forex, the best thing you can do is to stop trading and return to the basics. Make sure you find out why you have lost money. Was it your broker excessive slippage, or your trading system that suddenly stop working? What can you do to solve this problem and start making some money? These are a couple of the questions you need to ask yourself and find out the answers. In my opinion, the first thing you need to do to solve this issue is to analyze your most recent trades. Did you follow the exact rules of your system? What was your state of mind at that time? Were you stressed out? Usually, when you let your emotions get involved in your trading, problems begin to rise… The thing you must avoid doing is to feel sorry about yourself or get depressed… This won’t take you anywhere. Just think about your most recent trades in a rational matter. Be objective… This is the way professional Forex traders deal with their losing strikes and their emotions. Why is so difficult to make money on Forex… Forex is probably the most challenging financial market in the world. Here are some of the reasons that make this market so difficult:
1 - The market is open 24 hours a day. This is probably the biggest problem to solve. You can’t stay on your computer 24 hours a day watching the Forex market. You can stay an entire day waiting for an opportunity that only arises when you’re sleeping…
2 - The leverage: Most brokers offer you the opportunity to trade 200 or even 400 times your money! That might appear a great thing, but it’s currently one of the biggest reasons that explain why most beginers lose most or all their money on just a few months. Leverage allow you to double your money on a single trade, but it also allows you to lose your entire account with a single mistake.
3 - The “Get Rich Quick” schemes. Forex is one of the markets where sellers promise everything and usually deliver nothing. Every system developer or seller promise you the opportunity to make a fortune without much effort. Unfortunately, the only way you have to make a fortune on the short term is by taking huge risks. Avoid those get rich quick schemes and you’ll increase your odds of making money on Forex.
4 - Complexity of the market. On Forex there are several economic releases every day. You need to stay on top of all these releases in order to know how to act, and trade effectively.
1 - The market is open 24 hours a day. This is probably the biggest problem to solve. You can’t stay on your computer 24 hours a day watching the Forex market. You can stay an entire day waiting for an opportunity that only arises when you’re sleeping…
2 - The leverage: Most brokers offer you the opportunity to trade 200 or even 400 times your money! That might appear a great thing, but it’s currently one of the biggest reasons that explain why most beginers lose most or all their money on just a few months. Leverage allow you to double your money on a single trade, but it also allows you to lose your entire account with a single mistake.
3 - The “Get Rich Quick” schemes. Forex is one of the markets where sellers promise everything and usually deliver nothing. Every system developer or seller promise you the opportunity to make a fortune without much effort. Unfortunately, the only way you have to make a fortune on the short term is by taking huge risks. Avoid those get rich quick schemes and you’ll increase your odds of making money on Forex.
4 - Complexity of the market. On Forex there are several economic releases every day. You need to stay on top of all these releases in order to know how to act, and trade effectively.
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