It is very
easy to lose money in Forex. Most of the time, traders in the
market simply lose money by trading in the market. It may sound
surprising to you how people lose money when they are trading. But
it happens, and the reason they lose money is they overtrade the
market. They do not know when to stop trading and thus keep on
trading on the market. If they lose a trade, they trade again
hoping to regain what they have lost, and lose again in the market.
This is a cycle of losing and they do not stop until they have lost
their capital.Trading in Forex is not a game where you can trade
the market because it has random winners.
Though
masters of Forex use the word random to say that, every time
winners of the market are different, they also mean this market is
changing so quickly and it is not possible for traders to correctly
guess the market each time they place trades. The professional
traders in Singapore always consider trading as a probability. No
one in the world can find 100 percent accurate trades, so if you
find any website claiming to do so,stay away from them. In order to
survive the market, you need to strictly follow proper money
management so that you can afford to take losses.
Less trading can protect your money
If you
place 20 trades on the market and another trader has placed 10
trades in the market, who do you think will have the most profit in
the market? You may think it is you who have placed more trades so
you have more chance in the market. You will find that traders who
has placed fewer trades in the market have the most profit. He is
placing a smaller amount of trades which gives him the time to
analysis the market beforehand. Making a profit in the exchange traded
funds industry has no relation with your trading numbers. If
you place fewer, but quality trades in the market, you will make
more profit. Placing more, but cheap trades in the market will not
make you a winner in the long term.
People will
not simply give $800for an iPhone if it becomes slow after six
months. Quality comes first and profit is its logical sequence.
When you place fewer trades, it will be better than the other
traders, and you have less chance of losing your capital. Many
traders in the market have lost their profit because they overtrade
the market. Know when to trade and when not to. It is as important
as making your profit and protecting your capital.
Develop a solid system
The Forex
market is a dynamic market and every single second it’s changing
its nature. As a new trader you need to develop a solid trading
strategy which will guide you to finding the best possible trade
setup. Another mistake that many novice traders make is they trade
the lower time frame for high-frequency trade execution. However,
expert traders always suggest using the higher time frame since it
gives the high-quality trading signal. Never place the trade based
on your technical analysis only, rather, try to learn the
fundamental analysis skill as it will help you to place a trade in
favor of the existing trend. Some professional traders even
consider fundamental factors, such as the key price driving
catalyst. Try to develop a balanced trading strategy which will
take care of all the essential trading parameters.