There are many things to be considered by a forex trader to become successful. One of those things is the psychology to trade. Forex trading is also considered as a type of gambling. Once you find a successful trading strategy, stick to it and use very small risk in any trading signal. There no single strategy that gives a 100 percent guarantee of profit a single trade would bring. The best strategies existing give a 70 percent winning chance. Market experts do not recommend involving in risk more than a percent per trade. Large hedge funds use less risk. There is no single person who would risk with these amounts of money in normal state of mind in any trading idea. It is better to divide risk in several parts and trade various forex market opportunities individually. These funds move the markets and everyone should play according their rules and it is unacceptable to neglect the money management.
Lack of Knowledge of Market for Forex Trading
The major problem for new traders is lack of knowledge of the forextrading market. Every individual trader expects to make more money if he/she has waited for a very long period of time for the opportunity. The investor is apprehensive to miss the opportunity since he is unaware when the next trade will occur. In real there are new opportunities coming up daily and it is incorrect to attach importance to a single trade idea that come up in the trader’s mind.
The other problem is the forex trading terminal. Whenever a trader studies the forex market he get to see numerous trend lines in several time frames. It is really hard to select the right one. When the market touches each line, the trader needs to act fast whether to close the position or not. This creates emotions that are dangerous for the trader. The proper way to trade manually is the ability to handle many small positions and keep track of every open trade. A trade can be opened using a day timeframe, another using hour timeframe. Both should be considered separately and each trade should have its own take profit and stop loss level. With an increased number of small open positions and with the use of several trading edges a stable and profitable trading system can be built.
It is difficult to look at the market from various angles, still this is the proper way to trade it. Hedge funds hire several traders to trade a single market. When one trader may see a buy opportunity, another might see the opposite. However, both can make money in the long term, in a much hedged way. It is impossible to make a living without a proper trading account. Moreover, forex trading is a very hard job and it is much easier to make money working anywhere else. In the long run trading can make money, therefore, it is inappropriate to involve risk while trading. At the same time it is time consuming too.