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Forex Trade: Main Drawbacks of a Forex Trader



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Futures Trading Systems SpacerWhy is it that very few traders succeed in the Forex tradingenvironment while the grand majority of traders fail to achievesuccess? Although there is no hard answer to this question,there are a few things that will put you one step ahead and willdefinitely put the odds in your favor.

The main purpose of this article is to guide you through someimportant aspects of Forex trading. But in a different way,instead of telling you what to do or the best way to do it, itwill tell you what to avoid. Sometimes it is better to identifythe main drawbacks on a discipline and then isolate them so wehave the best results at a certain level of development.

The search for the Holy Grail

Many traders spend years and years trying to find the Holy Grailof trading. That magic indicator or set of indicators, onlyknown by a few traders, that will make them rich in a shortperiod of time. Fact: Well, there is no magic indicator, nor aset of indicators that will make anyone rich in a short periodof time. The main reason of this is because market changes,every single moment is unique. Every Forex trading system willfail from time to time. Our work here is to find a Forex tradingsystem that fits our personality as traders, otherwise thetrader will find it hard to follow it.

Looking for Easy Money

Unfortunately most traders are attracted to the Forex market forthis reason. Mainly because of the publicity showing or rathertrying to show how easy is to trade and make money in the Forexmarket. Fact: Yes, it is very easy to trade, anyone can do it.It is as hard as one click. But the second part of it isn’t thateasy. Making money or achieving consistent profitable results ishard. It requires lots of education, patience, discipline,commitment, and this list could go to infinite. In a few words,it is possible to have consistent profitable results, butdefinitely it is not easy.

Looking for Excitement

Some other traders are attracted to the Forex market or anyother financial market because they think it is exciting to be atrader. Fact: Yes, it is very exciting to trade the Forexmarket. But if this is the main reason you are still trading theForex market, sooner or later you will discover the mostexpensive adventure you have ever known. Do some thinking on it.

Not Using Money Management.

Most traders forget about this important aspect of trading. Theythink they shouldn’t be using money management until theyachieve consistent profitable results. They totally forget aboutthe risk side of trading. Fact: Money management allows yourprofits to increase geometrically, but also limits your risk onevery single trade. Money management tells you how much to riskon each trade. Using money management is a must if you want toachieve your trading goals. By using money management you makesure you are going to be able to trade tomorrow, the next week,month and the following years.

Not Being Psychology Tuned

This is one of the most underestimated subjects when it comes totrading. One of the main principles of financial markets is thatthe price of each instrument is based on the perception of eachindividual participant “the crowd.” In other words the price ofeach instrument is determined by the fear, greed, ego and hopeof all traders. Fact: Being aware of all psychological issuesthat affect the decisions made by traders will definitely putthe odds in your favor.

Lack of Education

Education is the base of knowledge on every discipline. Aslawyers and doctors require several years of college until theyget their degree, Forex traders also require long years ofstudy. It is better to have someone experienced to guide youthrough your trading, since some information could take you inthe wrong path. Fact: The market teaches us invaluable lessonson every single trade made. The process of education for a Forextrader could take for ever. That’s right, we never stoplearning. We should be humble about the markets and ourknowledge; otherwise the market will prove us wrong.

These are some of the most important barriers every trader faceswhen trying to trade successfully.

Trading successfully the Forex markets is no easy task, itrequires a lot of hard work to do it right, but with the righteducation, you will put yourself closer to your trading goals.

About the author:

Raul Lopez is a full time Forex trader and founder of a high quality Forex training and Forex trading course provider.


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