Forex trading secrets revealed |
Now let's take a look at the secrets that are actually applicable to actual trading. The information below will assist you in optimising and calibrating your Forex trading strategy, if you alre haveady one. Also it will be helpful for traders that are still defining their trading style and are looking to just try things out.
Many traders fail to achieve profit
Believe it or not, around 80% of retail Forex traders are actually losing money when trading Forex. Why? The main reason is that these traders are not prepared to trade on high volatility periods and that they tend to be too greedy, even in 2018.
What is important to understand is that while 80% of traders are losing on their accounts, the remaining 20% of traders are able to benefit from their mistakes.
When it comes to trading FX online, you should not be too optimistic. Don't get us wrong, you should of course only start trading with the aim of achieving a profit, yet your profit target should be realistic. What is a realistic profit target? In rare cases your return should be no higher than 5% a month, usually anything below 5% is rather realistic. Not being greedy and being realistic is one of the most important secrets of currency trading.
What is important to understand is that while 80% of traders are losing on their accounts, the remaining 20% of traders are able to benefit from their mistakes.
When it comes to trading FX online, you should not be too optimistic. Don't get us wrong, you should of course only start trading with the aim of achieving a profit, yet your profit target should be realistic. What is a realistic profit target? In rare cases your return should be no higher than 5% a month, usually anything below 5% is rather realistic. Not being greedy and being realistic is one of the most important secrets of currency trading.
Not every broker can be trusted
Another important secret is that the licensing of FX brokers is important, but not every license comes with the same degree of trust and security. One of the secrets of Forex that many brokers don't want you to know is that licenses from offshore regulatory bodies can be almost worthless. This is why you should only settle for a broker that is regulated by a well-known authority - like the Financial Conduct Authority from the UK.
Just imagine that you have got into a trouble with your broker and you want to submit a complaint and request your money to be sent back to you. How easy would it be to reach out to authorities in the Seychelles or Belize and request them to handle your case? The chances that this will be done in your favour are rather small.
However, a vital thing to remember is that FX trading may not be easily regulated in every country, hence some brokers may serve various jurisdictions under offshore licenses. What is important to take a look at is that the broker operating under offshore license should have a backup of a regular well-known European license.
Just imagine that you have got into a trouble with your broker and you want to submit a complaint and request your money to be sent back to you. How easy would it be to reach out to authorities in the Seychelles or Belize and request them to handle your case? The chances that this will be done in your favour are rather small.
However, a vital thing to remember is that FX trading may not be easily regulated in every country, hence some brokers may serve various jurisdictions under offshore licenses. What is important to take a look at is that the broker operating under offshore license should have a backup of a regular well-known European license.