Why Forex is or isnít for you

This is a discussion on Why Forex is or isnít for you within the Off-Topic forums, part of the Apple Forums category; So, you might like the idea of being a Forex trader, but it is not right for everyone. Back in 2016 the UKís Financial Services ...

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  1. #1
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    Why Forex is or isnít for you

    So, you might like the idea of being a Forex trader, but it is not right for everyone.

    Back in 2016 the UKís Financial Services regulator, the FCA, conducted a review of retail trading Ė not just Forex, but all types including CFD trading and binary options Ė and found 82% of retail traders lost money. Trading is a zero-sum game so there are going to be winners and losers but this ratio led us to two conclusions:

    This underscores the importance of working out if Forex is right for youÖbefore you consider risking your money on it.
    It means the 18% balance must either breakeven or be profitable Ė about 1 in 5.
    Weíve pulled together the reasons traders should and shouldnít be trading Forex for. All aspiring Forex traders should be asking themselves their reasons for getting into Forex trading before they get started.

    If you can honestly say its for the right reasons, and not the wrong reasons youíll have a much greater chance of making a success of it, of being in the 1 in 5 group of traders, over the long term.

    Learn more, take our premium course: Trading for Beginners
    5 reasons why you shouldnít trade Forex
    #1 You trade with money you canít afford to lose
    Because the market can be volatile, there is always the risk of losing money when trading a currency pair.
    In addition to the inherent risk linked to trading, with Forex trading you need to add margin trading and leverage, which means that you can trade large amounts with little initial capital.

    So, this high level of risk means that you need to be sure that you do not use money that you need to live on Ė it sounds an odd thing to say, but make sure you always trade with money you can afford to lose!

    #2 You donít know what youíre doing
    Before even considering trading, you need to know the basics of the markets, what influences them, and how trading works.
    Ö you need to have a trading strategy that suits your trading styleAnother important aspect is you need to have a trading strategy that suits your trading style, with strict money management and risk management rules that govern how you allocate your funds to trades.
    If you have no trading experience, and you do not know how markets work and relate to each other, Forex trading might not be right for you Ė at least not yet.

    Must-reads:

    7 Must Know Tips to Improve Your Trading Mindset
    Why FOMO Can Obliterate Your Trading Profits
    What is Revenge Trading? (And How to Overcome it)
    Trading Psychology: How to Control Emotions While Trading
    #3 You canít handle when youíre wrong, or when youíre losing
    When making trading decisions, you can be right and make money, but you can be wrong and lose money.
    Thatís fine Ė as long as your profits are higher than your losses. Losing trades are part of the trading game Ė you need to be prepared for this and not take it personally!

    In Forex trading, you need to quickly recognise when youíre wrong, and close losing trades as early as possible. Itís important to develop your ability to accept your losses and learn from your trading experience.

    But do remember, itís ok to be wrong Ė you canít be right 100% of the time in every single trade you execute. And if you canít handle losing, you wonít be able to be profitable in the long run.

    Read: The Dangers of Forex Trading Revealed

    #4 Youíre risk-averse
    Fast-changing market conditions, high volatility, and leverage can make Forex trading a high-risk activity.
    You can make huge returns in the FX market, but these kinds of returns do not come without risks, especially when using leverage.

    So, if youíre generally a risk-averse person, Forex trading is not going to fit your personality.

    #5 You donít have time
    There are several trading styles you can use when trading currencies, each requiring a certain amount of time in front of the screens.

    For example, you can use a trend following method, or position trading strategy, which will require less time than short term trades, like scalping or day trading.

    Keep in mind that learning about trading, the Forex market and how to develop the right trading plan takes time. Youíd better be sure you have time to dedicate to this activity before starting to trade in currency pairs.

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  3. #2
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    Feb 2021
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    I need to buy a powerful computer to download a trading terminal. I am a beginning forex trader. Have you ever tried online trading? Once you are into it, you will make it your profession. You will see that it brings good and stable profits if you approach trading seriously. I am currently cooperating with etoro https://tradersunion.com/brokers/forex/view/etoro/. It is the best platform I could find.

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