Issues faced while trading in forex

Forex trading is a big-money game and a lot of people can’t handle the market properly. They blame a lot of factors that were the treason behind their doom, but the truth is that only some reasons are real or genuine enough that can be termed as a problem for a forex trader.

The traders either see a shortage of capital or are flushed out of cash as soon as they enter a trade because they were not using leverage properly.

Let us have a look at some of the most prominent problems of a trader while trading in forex.

1. The absence of a working strategy:

The strategies that work for a forex trader are often ignored by a newbie. The new ones on the turf think that they can control how they move as the market does but the reality is much different. No one can control the trade once the market darts toppling or moving violently.

The Whole idea of a working forex trading strategy is to be disciplined in terms of entering an exiting a trade and using the capital wisely.

There is a saying that no trader should never risk more than 1% of the capital ideally, but there are brokers who risk more than 20, sometimes more than 30% of their trading capitals on one single trade. If that trade goes wrong, tall the money taht was risked goes down the drain.

2. Risk and the inability to mitigate it:

The traders know when a trade is about to go wrong and most of the time they sit through the time which could have been used to mitigate risks. Stop-loss orders apart from risking less capital are one of the most important things that a trader can do while trading in forex.

The stop-loss orders save a trader from a wrong trade in the same way a net tied between two roofs does.

The person jumping from one roof to the other can not be hurt ion the presence of a net similarly, a trade using a stop-loss order is least affected by a wron trade. Here, the trader is taken out of the trade right when the market crosses the threshold value taht the traders decide by themselves.

Risk can also be avoided by looking at the pairs that best describe the trading goals of a forex trader. Volatile stocks can be of great help to make some quick money but at the same time, they can also flush the capital of the trader pretty easily. Exotic pairs see a lot of volatility while some of the less exotic pairs are subject to a lower volatile market. Pick carefully.

3. The “I have no time” excuse:

Traders always come up with this statement whenever someone asks them about there whereabouts in trading and this is a false thing o say and a 100% lie. Each forex trader has the time to trade. This is because of the fact that the forex market is practically open forever.

As one trading day ends in Tokyo, another opens in New Yor. BY making precise calculations about the currencies, the traders can take the advantage of such situations and make easy money but along that they have no time is like saying we have no food, after having a whole wheat-field.

The inability to adapt as the market changes:

A lot of traders have seen the market going through significant changes. From the US bond Yields to India banning cryptocurrencies. Everyone has seen what can happen in the market and frankly, no one can clearly predict that. But what the trades can fo is, they can adapt to the market as it is showing signs of change.

When tesla was not around, the stocks of lithium or lithium-ion battery manufacturing firms were not so much talked about but as soon as Elon Musk entered the market with his electronic cars, everything flooded.

At such a time, investing for a long time in stocks of oil can be a bad idea. Rather, investments can be down int he Lithium-Ion battery manufacturing units

Learning through actual trades:

Demo trades offer what most of the trading cannot and that is the feel of safety while trading. Most of the online forex brokers provide demo trading for their novice traders so that they can understand what trading is and how does the market reacts to different things that happen around currencies. When traders skip this part and straight away move on to trading, they lose a lot and then they learn. Demo trading involves an online currency that does not hold any value ut can be used to make trades and the traders can see how they are performing under pressure. The absence of real money is also a problem because then emotions like fear and greed are not present.

Scam brokers:

Scam brokers pose a real threat to the trading society as they drain out the capital of the investor in creative ways, when a broker says that it is offering leverage of 1:1000, that should be seen as a scam because giving out such lethal opportunities to novice traders can be very ba for them. Sucha leverage means that with the help of one hundred dollars, a trader can control the market of one hundred thousand dollars. Novice traders cannot handle such pressure and in no time they lose their trades. The broker then takes one hundred thousand dollars out of their pockets.

Bottom Line:

Trading is a risky business and forex is a whole different ball game. The traders should know that the market is always succeptible to volatility and anything can happen when the market is moving. Make sure you know what you are putting yourself into and always trade with the money you can afford to lose. Always remember, math puts food on the table not emotions.