Are you wondering whether you should trade forex or not? Well I think in the long run it is definitely a good idea for everyone to start trading.
As with anything at the beginning of the business you will get confused and confused and won’t know where to turn. The trick is to take your time and learn as much as you can about forex.
Here are 5 reasons for you to start trading forex:
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Leverage
If you’re only just looking into trading forex as a part time basis then you probably don’t have a whole lot of money. That’s pretty much theittle point. Imagine: mexc If you only had $1000 to start with and you lost 2% a day which is pretty reasonable these days for the average trader. And DO NOT considers this small percentage a fortune!
That’s all right there, most people will say to themselves after a few losing trades that they will never trade forex again. Truth be told there is always room for improvement with any kind of trading, but with forex the level is VERY high. For every percentage point difference in your winning trades and losing trades, there is a pretty big difference in the amount of capital you lose. And I have yet to see a forex trading system that can guarantee 100% profit trades. So even if you have a profitable trading system with positive expectancy (which means you will make money even if you break even, losing money is OK) you are still dramatically reducing your trading capital each time you trade.
Leverage
If you read about forex trading, you will undoubtedly see the word leverage being used a lot. You wouldn’t even dare to suggest that the most wealthy men in the world (and I’m talking about the most wealthy men right now) could invest a fraction of their millions without using leverage. As a trader, we can and should use leverage to make money. It’s just a tool, and just like any tool it can be used intelligently as well as unwisely.
On Average Performance
If you’ve been trading for a while, you’ll probably hear about the big wins and quick profits. You may even have heard that you can make an average of 10-20 pips a day! Not only is this nowhere near the truth, but it also ignores many factors that determine average performance in the market. As a trader I like to look past this. My job is to identify those trades that have an average of 20 pips and trade them. It doesn’t matter if I make 20 pips or 200 pips or even 1000 pips, as long as I make money I am happy. Exciting? Yes, but not when you are trading with a huge leverage factor on your success.
Less Is More
I am a firm believer in the idea that too much information will only make things more complicated. People need to understand that to make money in the markets, you’ve got to learn to Restrict YourApplicable Graccording Whereas somebody who is suckered into picking tops and bottoms, and who has an endless amount of information chasing them that they know practically nothing about, will simple just not pay attention. It’s like picking the Sanies of God and being content with that.
If you learn to only trade when the conditions are right, you’ll do yourself a world of good. That’s advice I would give anybody anybody who is interested in trading forex.