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Avoiding Failure in the Forex Market
Forex 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
Technical Analysis
Today's Market Outlook
Hourly structure remains neutral, as the price action still in a range-trading mode, with the downside protected at 1.3200 support zone for now. Brief bounce to 1.3280 so far, needs to clear minimum 1.3292, to improve the near-term outlook and expose key barrier at 1.3320, clearance of which to resume
USDJPY - Bullish Above 80.00
USDJPY Upward pressure in USDJPY is relentless, with only two very mild negative daily performances being posted in the last 15 trading days (since the February 1 low of 76.02). Although signals for sentiment are at overbought extremes (and have ben for some time), any intraday dips are still
Technical Analysis for Crosses
The pair traded negatively yesterday below the resistance for the ascending correction channel to breach the critical support at 125.70; this level represents the neckline for a minor bearish pattern and its full targets reside with the MA 50 at 124.70 which signals that the downside move might be temporarily
Technical Analysis for Major Currencies
The pair continued trading very narrowly during the Asian session as seen on the provided daily chart. This tight range assisted Stochastic to show a bearish tendency; thus, we suggest a potential downside move today but not before clearing 1.3200 areas. Bears should be protected by a daily closing below
Daily FX Report
Currently, we are experiencing a phase of geopolitical tensions, especially in the Middle East, where the political uncertainty is a powder keg waiting to be lit. In view of the imminent oil embargo against the Iran, the oil price climbed close to nine-month high and pushed concerns about a resulting
Newsfeed display by CaRP
Fundamental Analysis
Morning Forex Fundamental
European services and manufacturing output unexpectedly shrank in February, reviving fears the 17-nation currency bloc is heading towards a recession. Preliminary composite purchasing managers' index fell to 49.7 in February from 50.4 in January, said Markit Economics said on Wednesday.
EUR/GBP And USD/JPY Moved Beyond Important Resistance Levels
Currency traders doubted which card to play in the post-Greece era. EUR/USD drifted sideways even as the EMU PMI's disappointed. EUR/GBP jumped above the 0.8422 range top after the publication of the BoE Minutes. USD/JPY extended its gains and regained the 80.00 mark.
Euro Quiet, Holds Onto Gains
The euro recorded moderate gains against most of its major counterparts, as it appears in need of a catalyst, following the agreement on Greece?s bailout on Tuesday. The single currency weathered a series of worst than expected PMI readings, remarkably well. According to an official from the International Monetary Fund
FX Takes A Moment To Consolidate
In the Asian session, regional equities were mixed but the weak sentiment did not spillover into FX. Looking at the Asian bourses, the Nikkei is up 0.44% on the day, the Hang Seng down 0.72%, and the Shanghai Composite up 0.25%, painting a confusing picture for things to come. EURUSD
Asian Market Update
China's benchmark money market rate hit a 5-week high at 6.80% for CNY30B in 6-month deposits. According to analysts China Premier Wen will announce at the March 5th National People's Congress that he will target GDP of less than 8%. GDP growth of 8% has been maintained in China from
Newsfeed display by CaRP
Technical Analysis
Today's Market Outlook
Hourly structure remains neutral, as the price action still in a range-trading mode, with the downside protected at 1.3200 support zone for now. Brief bounce to 1.3280 so far, needs to clear minimum 1.3292, to improve the near-term outlook and expose key barrier at 1.3320, clearance of which to resume
USDJPY - Bullish Above 80.00
USDJPY Upward pressure in USDJPY is relentless, with only two very mild negative daily performances being posted in the last 15 trading days (since the February 1 low of 76.02). Although signals for sentiment are at overbought extremes (and have ben for some time), any intraday dips are still
Technical Analysis for Crosses
The pair traded negatively yesterday below the resistance for the ascending correction channel to breach the critical support at 125.70; this level represents the neckline for a minor bearish pattern and its full targets reside with the MA 50 at 124.70 which signals that the downside move might be temporarily
Technical Analysis for Major Currencies
The pair continued trading very narrowly during the Asian session as seen on the provided daily chart. This tight range assisted Stochastic to show a bearish tendency; thus, we suggest a potential downside move today but not before clearing 1.3200 areas. Bears should be protected by a daily closing below
Daily FX Report
Currently, we are experiencing a phase of geopolitical tensions, especially in the Middle East, where the political uncertainty is a powder keg waiting to be lit. In view of the imminent oil embargo against the Iran, the oil price climbed close to nine-month high and pushed concerns about a resulting
Newsfeed display by CaRP
Fundamental Analysis
Morning Forex Fundamental
European services and manufacturing output unexpectedly shrank in February, reviving fears the 17-nation currency bloc is heading towards a recession. Preliminary composite purchasing managers' index fell to 49.7 in February from 50.4 in January, said Markit Economics said on Wednesday.
EUR/GBP And USD/JPY Moved Beyond Important Resistance Levels
Currency traders doubted which card to play in the post-Greece era. EUR/USD drifted sideways even as the EMU PMI's disappointed. EUR/GBP jumped above the 0.8422 range top after the publication of the BoE Minutes. USD/JPY extended its gains and regained the 80.00 mark.
Euro Quiet, Holds Onto Gains
The euro recorded moderate gains against most of its major counterparts, as it appears in need of a catalyst, following the agreement on Greece?s bailout on Tuesday. The single currency weathered a series of worst than expected PMI readings, remarkably well. According to an official from the International Monetary Fund
FX Takes A Moment To Consolidate
In the Asian session, regional equities were mixed but the weak sentiment did not spillover into FX. Looking at the Asian bourses, the Nikkei is up 0.44% on the day, the Hang Seng down 0.72%, and the Shanghai Composite up 0.25%, painting a confusing picture for things to come. EURUSD
Asian Market Update
China's benchmark money market rate hit a 5-week high at 6.80% for CNY30B in 6-month deposits. According to analysts China Premier Wen will announce at the March 5th National People's Congress that he will target GDP of less than 8%. GDP growth of 8% has been maintained in China from
Newsfeed display by CaRP