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How to Know that Forex Is Not for You

10:55 AM Dec 13, 2019
2103
Trading Psychology

It is widely believed that anyone can trade on Forex. And it’s true. But there is another more important question: are you capable of reaching real success? Professional trading is something that is really not for everyone.

The title of the article might be a bit confusing. Today we’ll talk not only about the signs that Forex might not be right for you. We will also discuss what needs to be done to fix the situation in order to help you achieve your financial independence.

You Don’t Have Any Additional Funds

One of the first and most important rules of any risk management plan is that you should not invest money that you cannot afford to lose. If you ignore this rule you might get into an unpleasant financial situation, since on Forex you will inevitably suffer losses.

If at this stage you don’t have extra money, then postpone it for later. Proceed to study trading and practice on a demo account for now. In the meanwhile, you can gradually save money which you can later invest in your account.

You Simply Can’t Lose

The foreign exchange market behaves unpredictably. That is why no matter how good you are as a trader you will still suffer losses. Most novice traders leave Forex after the first losing streak as they don’t know how to cope with losses and take them too personally.

To make it easier for you to deal with such situations, use the following tips:

  • Learn to see only numbers in trading values, not money.
  • Accept the fact that losing trades will happen regularly. Only your overall result including both profitable and losing trades matters.
  • Learn to control your emotions. Keeping a trading journal might help you with that.

You Are Not Ready to Learn and to Work

If you jumped right into trading the first moment you’ve heard about Forex then you are doomed to failure. Trading in the foreign exchange market requires careful preparation:

  1. You need to gain at least basic knowledge in trading.
  2. You should choose your trading style, strategy, trading plan and acquire a reliable risk management system.
  3. It is crucial to learn how to analyze the market in order to make informed trading decisions.
  4. You should practice trading on a demo account before investing real money.
  5. Get yourself a trading routine, learn to clearly follow your plan.

If you are looking for quick and easy money then Forex is not for you. However, the foreign exchange market can give you financial independence. If you take the process of preparation and trading seriously then you have every chance of becoming a successful trader

You Came to Forex for the Thrill

Many people trade in order to tickle their nerves. The risk involved in Forex trading brings them pleasure. As a rule, it is common for such traders to make irreparable errors:

  • Overtrading
  • Opening trades without analyzing the situation first
  • Making decisions at random hoping for luck
  • Trades of revenge
  • Missing of potentially profitable trades due to their “unattractiveness”

Such financial decisions will not allow you to linger on the Forex. Make a good trading plan and follow it meticulously. In any case, the unpredictable behavior of the financial market will allow you to get your portion of thrills.

You Are Too Busy

If you don’t have enough time for anything then Forex trading might not be suitable for you. Due to the high volatility of the foreign exchange market your transactions will require constant monitoring. What can help in this situation?

  1. Choose a suitable trading style. On Forex, there are many strategies and styles and each of them requires a specific amount of time. As a rule, the longer your trades the less monitoring they require. Thus, if you have a lack of time scalping is not suitable for you. However, day trading and swing trading might become your solution. When trading these styles, you can check your positions just a couple of times a day.
  2. Make a schedule. If you are used to spending time on your main job, study or family, then you already know when you have windows in your schedule. Make an accurate daily routine where you include the time for Forex trading. Often, opening/closing of trades and their monitoring don’t require more than half an hour at a time. Moreover, a convenient daily plan will help you better manage other things outside the foreign exchange market.
  3. Use Expert Advisors. Forex technology has stepped far forward. Now you have the opportunity to entrust the bulk of trading in the market to trading robots. They will open and close the trades you need in time even without your participation. Remember, however, that Expert Advisors also require a little control, but I’m sure that anyone can find half an hour a day to do that.
  4. Do not trade during the news releases. At such a time, market volatility becomes crazy. If you don’t have time to constantly monitor your transactions, avoid trading prior, during, and right after the release of major economic news. You can try trading on the price action after the news.
  5. Try copy trading. This must be the least time-consuming way to get a consistent profit on Forex. Moreover, you don’t need to delve into the essence of trading and analyze markets so thoroughly. You’ll only need to gain basic Forex knowledge and study the trading styles of successful traders offering trading signals. Then you can subscribe to their profiles and their trading positions will be automatically copied to your trading account.

Remember, that before you start trading, you will need to study Forex and build a solid plan. The more time you devote to this process in the beginning, the less time it will take you to trade after.

To Summarize

Yes, Forex trading is not suitable for everyone but this is only at first. If you are ready to work on yourself and devote time to training and trading itself, you can become a real successful trader.

Choosing a good broker, whose team is ready to help you at every step of your path to success, will also help you achieve your goals. Join FXCL today and feel the true support of a devoted company.

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