Forex Trading Tips - why most Forex traders loose their money

in Trading

Forex trading as you must have heard is very risky, I don't fully agree with this because it is when you do not know what how it works that the business will become very risky for you, when you know the rules and how to avoid losses, then you will also say that the business is very good. But the first statement is correct because if you don't know the rules, you will definitely lose your money some day. The Forex market is the largest financial market in the world today, so you can imagine how many people trade foreign currencies online. More than 90% of Forex traders lose their money, this will prove to you that this business is not meant for a novice. As a result of looking for ways minimize these losses, there have been inventions of so many software and robots. It is not advisable to use them, because they are not always accurate.

As a Forex trader you must have traded with a practice or demo account before trading with a live account, also when demo trading, get a trading journal so you can study the market conditions at different times, jut down your reasons for taking certain decisions and what was the outcome of those decisions. This journal will help you identify your mistakes and make you understand how the business works quickly. Always set a goal, you can set a goal of 10 percent profit daily, this is very much ok, with this you can make two hundred percent profit as your return on investment.

When ever you open a trade, always set your Stop Loss and Take Profit, your target could be a hundred pips and your Stop Loss three hundred pips, never risk more than ten percent of your account on a trade, also one hour chart is best for beginners.

When choosing a broker to trade with, look for the one that have a fast platform and the one with a low spread, also check their rating, you can check all this at FOREX PEACE ARMY. Never take this business as a get rich quick scheme, if you do you will lose your money. There are so many people who trade Forex as their only business and make millions of dollars from it monthly.

Another reason why most people fail in this business is because of their greed, if you have a target, once you reach that target close for the day, even if you can't make it, settle to make up for it another day.

Before you start trading make sure you have your own computer and internet connection, it is not advisable to trade from a cyber cafe, because of disturbance and connection problems. Have a trading time, never trade for 24 hours, the best time to trade is during the early hours of the morning and late at night, during this time there will be no news release to affect the market trend

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John Aimufua has 1 articles online

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This article was published on 2011/05/18