Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

tmbaru

Why Succeeding in the FOREX Market is So Challenging

Recommended Posts

Forex market is one of the vibrant markets in the world and also one of the most challenging. Trading in currencies is a risky affair and not all investors can suit this market. If you are considering plunging into this market you need to possess the necessary skills to enable you trade successfully or be willing to master the art of trading in the Forex market. Before we delve into the reasons why succeeding in the Forex market is a daunting task, let us have a sneak preview of the Forex market.

1. The daily operations of the Forex Market are equivalent to $ 3.9 trillion

2. The market is highly liquid as a result of huge trading volumes

3. The market is geographically dispersed

4. Operates around the clock save for the weekends

5. There is an array of factors that affect currency exchange rates

6. Individuals from all facets of life can trade in the Forex market as long as they have what it takes to trade in currencies

Making money in the Forex market is challenging and risky but can be done. In Forex market to make substantial profits, you buy a particular currency at a low value and then wait for it to appreciate so that you can sell it at a higher value. The risky part is when you buy that currency and instead of the value appreciating, it depreciates. This means that you are going to lose the money you had invested instead of earning returns on your investment.

 

Why people fail in the Forex Market

Lack of Proper Planning

 

There is a common saying that failing to plan is planning to fail. This holds water in the Forex market because if you fail to plan your trading properly then your chances of succeeding are minimal. To avoid losses stop to hastily dive into Forex trading without proper planning. Take time and prepare and plan adequately for what lies ahead in the market before investing your time and money in the market.

Poor Money and Risk Management

 

Proper money and risk management is crucial to succeed in the highly volatile Forex market. Currency rates can swing in one direction in a moment and in the next moment they are swinging in another direction. Therefore, poor money and risk management will see you lose a lot of money in the market. It is of paramount importance that you limit your downside by using stop-loss points always and as well trade only when good trading opportunities arise.

 

Other ways you can mitigate risks while trading in currencies is by utilizing a number of different indicators, placing stop-loss points at the closest resistance levels as well as utilizing trailing stop losses to lock in profits as well as limiting losses when the trade turns favorable. When you master the art of money and risk management you will significantly increase the rate of succeeding in the Forex market.

Failure to Identify the Entry and Exit Points Properly

 

Things that you should know as a trader when you are looking for entry points:

When the market is Bullish then;

1. Trend lines should breakout upwards

2. RSI, MACD and Stochastic should have positive divergences

3. Strong (close support and weak) distant resistance

4. Bullish candlestick engulfing

When the market is Bearish then;

1. Trend lines should breakout downwards

2. RSI, MACD and Stochastic should have negative divergences

3. Strong (close resistance and weak) distant support

4. Bearish candlestick engulfing

 

It is a great idea to place exit points, take profits and stop losses, before placing your trade. The exit points should be located at strategic levels and should only be modified if there is major change in the market that will affect your trade. Some of the strategic levels where you can place exit points are; just before areas of strong support or resistance, just inside key trend lines or at key retracement levels.

 

Though Forex trading is challenging if you perfect some of the things discussed above you can make good returns at the end of the day. You also need to exercise patience and ice-cold discipline while trading. Remember, Rome was not built in a day and you also need time to trade profitably in the Forex market.

Share this post


Link to post
Share on other sites

Though Forex trading is challenging, Learning, researching, reading and understanding the basics and, later on, the depth of Forex trading, will boost your authority status and increase your success rate.

Share this post


Link to post
Share on other sites

Excellent post covering the main points of FOREX.

 

Should also add that the geographical dispersion means that local politics of all the countries in the world can also have a huge impact on trading. For most people, it is very difficult to keep track (and to understand the consequences) of events happening halfway across the globe.

 

Unlike stocks (which are usually local companies/multinationals), FOREX requires a lot more research and a lot more awareness of political events.

Share this post


Link to post
Share on other sites

Jenny, FOREX requires a lot more research and a lot more awareness of political events...this entails fundamental analysis which is also an integral part of Forex trading

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • ANGO Angiodynamic stock watch, pullback to 11.01 support area with high trade quality at https://stockconsultant.com/?ANGO
    • SERV Serve Robotics stock watch, attempting to move higher off the 16.27 support area at https://stockconsultant.com/?SERV
    • MAR Marriott stock with a solid top of range breakout, from Stocks to Watch at https://stockconsultant.com/?MAR
    • Date: 7th February 2025.   Global Currency Market Analysis: Key Drivers and NFP's Impact.   The Japanese Yen, Canadian Dollar, and Australian Dollar have performed well throughout the week. However, today, the US will release the NFP Employment Change, Average Salary Growth, and Unemployment Rate. As a result, most currencies are likely to witness high volatility throughout today’s US session. US Dollar The US Dollar may seem like the worst-performing currency of the week. However, traders should note on Monday the currency opened on a gap measuring more than 1%. Therefore, the US Dollar is only trading 0.60% lower this week and that can easily change with the release of today’s NFP data. Analysts expect the Non-Farm Payroll figure to read 169,000 which is lower than the 256,000 from the previous month, but more or less, at the average of the past 6 months. The Unemployment Rate is expected to remain at 4.1% and the Average Salary Growth at 0.3%. If the NFP data reads higher than expectations, the US Dollar can quickly increase in value. Particularly, if the unemployment rate falls to 4.00%. Chicago Fed President Austan Goolsbee warned that higher trade tariffs could drive inflation. Fed Vice Chair Mr Jefferson added that interest rates should stay unchanged until the full effects of Trump's policies. Mr Jefferson is mainly focusing on the effects of tariffs, immigration, and taxes.   Live NFP Analysis   British Pound The British Pound was the worst-performing currency of the day on Thursday due to pressure from the Bank of England. The downward pressure came from the Monetary Policy Committee. Two members of the board, Catherine Mann and Swati Dhingra, supported the adjustment of the cost of borrowing by 50 basis points. Previously, analysts expected only 1 vote. In addition to this, no member took a hawkish stance which also put pressure on the GBP. The Bank of England also made adjustments to the UK Gross Domestic Product to illustrate a weaker outlook. Analysts also expect inflation to rise in the UK due to increases in national insurance contributions. For this reason, many traders currently hold a bearish bias towards the GBP. The current support level for the GBPUSD can be seen at 1.23567 which is currently 0.65% lower than the current price. However, the exchange rate will mainly be driven by the US Dollar throughout the day.     Japanese Yen The Japanese Yen is the best-performing currency of the week adding more than 2.10% to the JPY Index. The main price driver pushing the JPY higher is the Bank of Japan’s monetary policy and recent hawkish comments. Bank of Japan member Mr Tamura stated that the BoJ should raise interest rates to at least 1% by the second half of 2025. He cited ongoing inflation risks, with companies continuing to pass rising raw material and labour costs onto consumers. Tamura warned that if short-term interest rates stay below the neutral level, inflation will likely accelerate further. The hawkish comments continue to positively influence the Japanese Yen, the best-performing currency of 2025 so far. Many investors are looking to increase their exposure to the Yen, attracted by its safe-haven status and its current low value, which remains 14% below its 2022 level. Check out which Japanese Yen pairs are tradable here!     Key Takeaway points: Top Currencies: The Japanese Yen, Canadian Dollar, and Australian Dollar led the week, but US NFP data may shake up rankings. US Dollar: Despite a mixed performance, a strong NFP report could reverse losses, especially if unemployment drops to 4.0%. British Pound Pressure: The BoE's dovish stance and GDP outlook weighed on the GBP, with traders maintaining a bearish bias. Japanese Yen Strength: Hawkish BoJ comments and inflation concerns fueled a 2.10% JPY rally, attracting investors seeking a safe-haven asset. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news. Michalis Efthymiou HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • SATS EchoStar stock, watch for a top of range breakout above 29.6 at https://stockconsultant.com/?SATS
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.