Can anyone be a Forex Trader?
The best time frame in Forex
The choice of time frames are wide so you need to consider some factors to know what is best for you. The most preferred Forex time frames for beginners are 1 day, 1 hour and 5 minute so they can test their feel on the trading. Each price bar represents one day showing a change on the chart will be observed once a day. New price bars will appear every hour, putting more data on the chart for analysis. A new price bar appears every 5 minutes, showing market changes fast and in greater details. If you have more time to spend on forex trading then it would be best to use the 5 minute time frame.
Money management for losses
There would be a chance that you lose in Forex trading but what is important is how you would handle that loss. It is easier to manage losses on a 5 min time frame because a trader is able to monitor charts all the time and the losses are usually small due to the nature of 5 minute trading: price ranges are smaller and it is easy to tell when the market starts turning against your position. Hourly charts on the other hand have wider price ranges and therefore require wider stops to be placed and larger losses to be taken. So it is best to fix the loss as soon as you notice the chart dropping.
Reasons why Forex Traders lose money
There has been an estimate that more than 90 percent of forex traders lose money and end up quitting, but there is always a reason for that loss. Usually those with only a small amount of capital and outsized risk, end up being emotional with each swing of the market and jumping in and out and the worst times possible. Those who does not know risk management would be in big trouble because the main goal right now is to protect what you have and not make profit. Being greedy would get you nowhere so try not to grab every last pip before a currency pair turns because this can set you up to lose the profitable trade that you are sitting on. Don't be indecisive because switching back and forth will just make you lose little bits of your account at a time. Learn to admit mistakes and learn from that so you can move on and trade better.
Forex Trading can be stressful
Forex Trading can be really stressful but there is a solution for that. Here are some ways on how you can prevent getting stressed out with Forex trading.
Having knowledge and know what to expect would help you handle any situation. Remember that Forex Trading is constantly changing. Learn to practice detachment and just let the trade work on its own way. Constantly watching over the sell button can be very stressful. Take a break when everything is going wrong like taking a walk or having a breather so you can think well what to do next. Use everything that you have learned from this trade. This technique would help you feel more in control and reduce the level of stress. Try not to be emotional when doing this kind of trading because there would be a lot of risks involved here.
How Much Trading Capital Is Needed in Forex
If you are planning to do Forex Trading then one of the decisions that you need to consider is how much trading capital to trade with. You need to have a a bigger capital when trading but usually those who are starting up can only spare a small capital. This can still work for them if they choose their market carefully, being a disciplined trader and knowing how to manage their risk so that they can protect what they have and avoid totally losing them. Also make sure to use major currencies.
Risks of Forex Trading
Forex trading can be risky if you don't know how to use proper risk management. Forex is considered to be one of the most risky forms of investing because of the availability of leverage and unpredictable outcome. Newbies can minimize the risks by learning proper risk management and developing a solid trading plan. They should also learn to control their emotions to make better decisions.
Is it wise getting a forex broker?
When you are just starting in this kind of investment then it is wise to get a Forex broker because they provide traders with a trading platform or dealing station that allow them to buy and sell foreign currencies. They will also allow traders to use a practice demo account so that they can get a good understanding of what trading is all about. In choosing a broker, make sure that the broker has good reputation and someone you can trust because you would be working with them all the time.
Is Forex A Scam?
Forex itself is not a scam, but there are a lot of scams that are connected with Forex just like any other investments. There are a lot of people who are looking of ways to scam new comers since they are gullible and don't have much knowledge yet with Forex. Forex trading is a real business where you can earn, but it does not happen overnight. You need to work hard and be patient for that to happen. Getting a Forex broker would help guide you and protect you from scam.
Can anyone be a Forex Trader?
Anyone can be a Forex trader as long as they are determined and willing to face the ups and downs of this business. It takes a certain amount of persistence, patience and the ability to adapt to changes easily and not all people have those qualities. If you can control your emotions, approach Forex trading as a business and not just there to gamble, and if you are willing to learn more about this industry then you are all set to becoming a Forex trader.
Schedule of forex market
For those who are new in Forex Trading, the forex market opens on Sunday night around 21:00 GMT and closes on Friday afternoon around 21:00 GMT. Forex traders can initiate trades at any time between Sunday and Friday.
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For those who are planning to start up with Forex trading, it is best to start up with these major currency pairs.
Euro (EUR)
US Dollar (USD)
British Pound (GBP)
Swiss Franc (CHF)
Japanese Yen (JPY)
Australian Dollar (AUD)
Canadian Dollar (CAD)
These currencies are widely traded and have tight spread so it is easier to get instant gain from them. Avoid trading rare currency pairs because this kind of trading needs further knowledge to trade such pairs successfully.