Why do very few traders succeed in the Forex market, while most traders fail? There is no definite answer to this question, but there are several things that will bring you one step closer to the desired result and, of course, increase your chances of success.
The main purpose of this article is to guide you through some important aspects of Forex trading. I'm not going to tell you what to do or how best to do it, I'm going to tell you what to avoid. Sometimes it is enough to identify the main aspects that prevent a trader from succeeding and avoid them.
Many traders spend years and years trying to find the Holy Grail of trading. They are looking for a magic indicator or a set of indicators that only a few traders own that will make them rich in a short period of time.
Fact: Well, there is neither a magic indicator nor a set of indicators that can make someone rich in a short period of time. The main reason is that the changes in the market are unique at every moment. Any trading system, from time to time, can fail. Our task here is to find a forex trading system that will match the trader's personality, otherwise it will be difficult for the trader to follow the rules of the system, and at best it will become ineffective, at worst the trader will lose his deposit.
This is the reason that attracts most traders. In most cases, people are trying to show how easy it is to trade and make money on the Forex market.
Fact: Yes, at first glance, trading on the forex market is very easy, anyone can do it. But after the first transaction it becomes clear - not everything is so simple. It is very difficult to earn steadily on the forex market. It requires a lot of knowledge, patience, discipline, determination, and this list could be continued indefinitely. In short, it is possible to become a successful trader and earn steadily, but it is definitely not easy.
Most traders forget about such an important aspect of trading as money management. They forget about the risks that are constantly present when trading on forex.
Fact: Money management allows you to increase your profit geometrically, but also limits the risk with each transaction. Money management shows how much of the deposit you can risk in each transaction. If you want to become a successful trader, then you just need to use money management. Money management implies that you will be able to trade tomorrow, next week, next month and in the following years.
This is one of the most underestimated aspects affecting the success of forex trading. One of the basic principles of financial markets is that the price of each instrument is based on the perception of each individual market participant - the "crowd". In other words, the price of each instrument is determined by the fear, greed, ego and hope of all traders.
Fact: You need to be aware of all the psychological aspects that affect the decisions made by traders. A proper understanding of the "crowd" can significantly increase your chances of success.
Just as lawyers and doctors require several years of college education before they graduate, forex traders also require long years of training. The advantage will be learning from an experienced and successful trader, since some information on the Internet may not be completely accurate.
Fact: The market teaches us invaluable lessons in every transaction.
Here are some of the most important barriers that every novice forex trader faces.
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