“90% of Forex traders lose, and only 10% win.” As you continue your journey in the Forex market, you might have bumped into these statistics. For a moment, to see such numbers might be discouraging especially for those newbie traders. However, this is a reality every aspiring must face – trading currencies isn’t an easy endeavour. It requires time, patience, and a lot of effort to learn its ropes.
But don’t worry! It might be difficult but it’s not impossible to be profitable. In this blog, we’ll tell you why most traders lose, and only a mere 10% become successful. Also, we’ll give you tips on how you can be part of the 10% winners!
Avoid Emotional Forex Trading
Trading Forex carries a high level of risk. Therefore, this venture is definitely not for the faint of heart; those who are easily swayed by their emotions; and those who can’t deal with losses properly. Because Forex trading involves risking money just like other investments, traders are really tested emotionally. This fear roots from the fear of losing their hard-earned money. For sure, no one will ever want to lose, but to never lose isn’t just really possible. Losing in Forex is part of the game, and this is a fact we all need to accept. The reason why a lot of traders are unsuccessful is because they tend to make bad decisions when they’re emotional. They tend to trade more when they suffer a string of losses because they think they can win back their previous losses. But most of the time, this kind of behavior only adds more losses to them.
To aid this, a list of the best Forex brokers provide articles, blogs, and even seminars and workshops about how Forex traders can keep their cool during trading. With the right broker to guide you, you can be sure that your trading journey is going to go smoothly.
Develop Your Own Trading Strategies
To survive the Forex market, you’d need to have your own Forex trading strategies. This may include risk management techniques. When we talk about risk management, one thing rings a bell – leverage. Leverage is borrowed money from Forex brokers that increases your trading capacity. Many brokers provide traders with high leverage to lure them into doing Forex with them. Leverage ranges from 1:100 up to 1:1000.
Now for the more technical aspect, you may also explore trading strategies like scalping, swing trading, or day trading. Scalping is a fast-paced strategy where a trader holds onto his trades for only a few seconds. The idea is to earn a small amount of pips as frequently as he can. Whereas, in day trading, the trader holds onto his positions for the entire day, and finishes with either a win or loss. Last is swing trading where the trader keeps his positions for a few days for bigger profits.
Maximise the Use of a Demo Account
The offering of Forex brokers of demo accounts should not be taken for granted. Demo trading is such an important tool for newcomers in the Forex market because it enables them to test everything that they’ve learned about trading without any investment risk. Using a demo account from your broker of choice allows you to know if its trading platforms are stable, and discover if its trading conditions meet your needs.
Now you might ask, how long should you be practicing with a demo account? This really depends on you. It could take months, and even years. But the important thing is to make sure you’re ready and confident before jumping into real trading. Also, it’s ideal to start with small capital first just so you can test the waters and see if Forex trading is something you’d really want to pursue.
In this blog, you’ve learned how damaging it can be when you let your emotions rule over you especially during Forex trading. Plus, in order to really succeed, you’d need Forex trading strategies that suit your needs. Luckily, the strategies such as scalping, swing and day trading are allowed by all Forex brokers.
Now with all the pointers mentioned above, we hope that they can help you to be part of the minority who would find success in Forex trading.