Why nearly all forex traders lose their money
It is not a surprise that the majority of the Forex traders finally loose their investments. The reason for that is straightforward – most of the investors take too large risks, in the hope of giant profits. They don’t want to accept the fact that online trading is not about luck and if they were fortunate in the beginning, it won’t pursue them all the time. If a person tells you that during a month he made $500 out of first $50, it may be correct. Also the truth is that if this trader doesn’t change his trading technique, he may end up with zero. Every trader has to be prepared to the failure.
One of the main aspects of trading technique is the clever money management. Let’s take a look at the risk levels that might be used when opening a trading position. Risk is the amount of % of a current investment which can be afforded to be abandoned if your trade reaches the stop loss.
The world’s principal Forex traders strongly advise that the risk level must stay at 2-6% of the original investment. If you don’t have much trading experience, we recommend you to set up your risk level to no more than 2% only. If the level of your deposit has been altered, the lot size should be recalculated consequently based on the rule of 2%. If your capital is small and the Forex trading platform you are using doesn’t allow you to open a trade with a little risk, it feels right to move to another Forex platform where lesser lots and mini accounts are allowed.
Another primary factor in Forex trading is the time frame you want to trade on. According to the experience and advice of the greatest traders, you should prevent too regular transactions. It is almost impossible to predict the prices within a day, mainly for beginners. It is difficult and risky to catch the market’s movements during a day.
The only option would be trading on the daily charts, where each Japanese candle stick springs up during a day. Thus you won’t ought to spend hours looking at your computer attempting to make a few dollars. You will require just few minutes a day to make the analysis of the market and implement the trades. You won’t be nervous and under pressure trading on the daily charts. Believe me trading within a day and scalping requires a strong character and mental health and is not for anyone. Trading on the daily charts doesn’t include high risks and minimizes the chances of making a mistake.
Article Source: Messaggiamo.Com
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