|
 
Avoiding Failure in the Forex MarketForex trading can be an incredibly profitable way to make a living. The combination of margin leverage and a low minimum amount required for trading make forex trading ideal for small investors. However, despite the opportunities for profit, the majority of forex traders lose all of their money within a year. Why? Well I have found six root causes that can explain why so many new forex traders fail: 1. Unrealistic Expectations. Too many novice traders read about how easy it is to make money trading forex and they just jump in and lose everything before they even know what hit them. Forex trading is not a get rich quick scheme. It requires hard work and research to be successful. And even then, you cannot expect every trade to be a winner. Even the best traders lose on trades. The key is knowing when to cut your losses and focus on the winners. 2. Not doing enough research. Forex trading is easy to learn, but difficult to master. Experienced traders make it seem so easy, but predicting currency prices is a complex endeavor. And as a small investor you are at a disadvantage. Large financial institutions have resources that you don't. They may have an entire staff analyzing the most recent economic indicators while you just have yourself. You must be prepared to spend some solid time learning before you can expect to win big. 3. Gambling instead of investing. If you think you can beat the market without doing research and just picking currency trades based on a hunch, good luck. I've seen people do this and they usually pick a few winners and make some short-term profits, but in the end they just get slaughtered. 4. Lack of focus. Depending on which broker you use, there are likely dozens of currencies you can trade. But when you are just starting out, think small. Pick a few of the most popular currencies, such as the US Dollar, the Japanese Yen, and the Euro, and focus exclusively on them. The more currencies you trade, the more data you will have to analyze in order to spot trends. Better to know a few currencies really well than to know just a little about each. 5. Not having a trading system. There are literally hundreds, if not thousands, of different trading systems available. Some you will have to pay for, but many are free. Choose a system that is right for you based on your capital, your goals, and your personality. Without a system, you might as well be throwing darts. 6. Not sticking to your system. Having a trading system is not enough, you have to follow it through good times and bad. This is easier said than done. Its easy to get greedy and go for the big score or get nervous and get out too soon. You must follow your system to determine both entry and exit points. If you ignore them you risk missing out on a big upswing or being stuck in a trade as it goes sour. The best forex traders know that knowing when to get out of a trade is even more important than knowing when to get in.
Recent Forex News
Forex Technical Analysis Reports (ActionForex.com) Technical analysis reports from selected analysts around the world on forex market. Available in ActionForex.com Australian And New Zealand Dollar Breakout Potential Draws Analysts The Aussie and kiwi dollars have come under renewed selling pressure through the end of this week. Heading into the weekend, ranges are clearly growing progressively mature and strained, while a few crosses have already made the intial push for a breakout. A resolution to this congestion period must come... FX Thoughts for the Day AUD-USD @ 0.6217/19...Long term range of 0.60-0.70. Aussie has risen sharply taking Support of the 8-SMA on the hourly chart during the Asian and European session and now has started to come off the highs of the day. Overall Aussie would consolidate between 0.60 to 0.70 in the longer term.... Daily Technical Strategist While EUR remains trapped in its triangle pattern as well as the 1.2330 and 1.3298 levels, break out of the mentioned triangle continues to dominate the pair's price action. Break of the 1.2330 level is envisaged to be triggered as its present consolidative moves remains corrective of its decline started... Technical Analysis Daily: USD/JPY The U.S. currency descended against the Yen yesterday. Bottom level was reached at 93.54, and closing the day at 94.18. During the Asian session the currency couple traded around 94.70, due to the stabilization of financial markets overnight. In the short term we see possible consolidation in downward direction. The... Forex Technical Analysis EUR/USD is in а downtrend, after finalizing the rebound from 1.3882 (Sept. 11 2008) at 1.3882. Technical indicators are falling, and trading is situated below the 50- and 200-Day SMA, currently projected at 1.4049 and 1.5194. Newsfeed display by CaRP Forex Fundamental Analysis Reports (ActionForex.com) Fundamental analysis reports from selected analysts around the world on forex market. Available in ActionForex.com Euroland: Very Weak PMI Should Spur ECB to Cut Rates Dramatically Yet again, flash PMI for Euroland fell unexpectedly sharply from the previous all time low, and our below-consensus estimate proved too optimistic. This is clearly worrying - the composite PMI is now signalling close to -0.4% growth q/q (-1.6% annualised). It is clear that Euroland is facing a recession that... Dollars Bulls Now Owe It to Tight Coupling I've talked about the market process plenty of times before. Specifically how it's able to consistently, over time, produce extremely efficient interaction among human beings in the marketplace, in the business place and in life. I try to make it sound simple. I try to boil it down to the... Canada's Inflation Rate Sharply Lower as Energy Prices Tumble Canadian consumer prices fell by a greater-than-expected 1% in October with the year-over-year rate slipping to 2.6% from 3.4% in September. The monthly decline was the largest since June 1959. Expectations had been for prices to fall by a more modest 0.6%. The seasonally adjusted index fell 0.5% in October... Dollar Bulls Are Still in Control But for How Long? Another week is finishing today, with Asian markets gaining overnight and European session trading mixed after earlier rumors that Citigroup is up for sale. The bank lost heavily this week with the stock price falling to 15 year low. Investors have lost their confidence in the bank and they already... Canadian Consumer Price Inflation Fell to 2.6% in October from 3.4% in September On-year CPI inflation of 3.4% in both September and 3Q08 gave way to a 2.6% in October, as the seasonally adjusted index fell 0.5% and the unadjusted index tumbled by 1.0% in month-on-month terms. In the three months between July and October, the so-called headline (all items) CPI slid 1.4%... Newsfeed display by CaRP |
