When it comes to trading, most people think of it as a piece of cake. However, for a lot of people, forex trading is hard. Of course, from an outside perspective, trading seems to be a smooth sailing journey. The only thing you have to do is to buy, sell, or do nothing. This implies that there is a 50% chance that you will correctly act each time.
You could be thinking, “Why do I need to ponder if forex trading is challenging?” The fact that the forex market is the most liquid in the world and that billions of individuals and organizations intervene there ultimately gives rise to the notion that it is difficult. A wide range of issues, including governments, politics, the environment, public health, and the success or failure of corporations, have an impact on the currency market.
Reasons Why Forex Trading Is Hard For Some People
1.) Inadequate Education
According to the Bank for International Settlements, the FX market reached a $7.5 trillion daily volume in 2022. Now consider how many participants the forex market should have with a daily volume of 7.5 trillion dollars in transactions. Maybe hundreds of thousands!
With so many players in the FX market, your academic credentials are irrelevant. In the world of currency, experience is the best teacher. So, before entering the forex market, master the fundamentals of FX trading first.
2.) Risk and Excessive Trading
In FX trading, follow the 1% Risk Rule. It implies that you never take a trade with a risk that exceeds 1% of the value of your account. This guideline aids in preventing a trader’s capital from dramatically dropping in unfavorable circumstances.
In addition, although some may think that risking 1% or less per trade is insignificant, it can result in excellent results. If your risk is 1%, you should aim for a profit of 1.5% to 2% or more on each profitable trade. So risk management is key to profitability in the FX market.
3.) Low Propensity To Accept Randomness
Remember that the market is not within your control. You have no control over how much the EURUSD will decline or whether the AUDUSD will go higher or lower from its current price. So, developing an acceptance of randomness is vital for FX trading.
Most people fail to visualize things in various dimensions. If you want to examine visuality from a variety of angles, the book Trading in the Zone by the late Mark Douglas can be instructive.
4.) No Boss And No Rules In FX Trading
FX trading is difficult in part because there is no supervisor and no set of standards to go by unless you work for a trading firm. You get a ton of freedom from it. You can trade any currency pair you want, make the largest possible deposit, and use the highest possible leverage.
The fundamental finding is that the utter lack of regulations in the forex market forces you to make bad decisions.
5.) Lack Of Patience
Last but not least, people have a terrible lack of patience. Waiting, however, is the cornerstone of successful trading.
Do you concur that most people are impatient? Similarly, the majority of traders lose money. Is that just an accident? The clear connection you’ll find in this industry is between the reality that most people lack patience and that most traders lose money.
So what’s the remedy?
- Make use of the daily timeframe.
- Try to do one or two setups each week.
Make It Easy Using the Right Way
It’s up to you to decide if forex trading is hard or not. Forex trading has a connection with your personality type. If you are a calm, composed, analytical person who can be focused on a task, forex trading will be simple for you.
If forex trading seems like an uphill task to you, feel free to contact Telegram. Forex, where you can get an easy route to success.