The Foreign exchange market is a place full of opportunities. Traders from around the world come to take their chances in the financial world.
For all retail traders, this is a challenge. It’s like moving to New York. If you can make it there, you can make it anywhere.
Same with Forex trading. If you can trade for a living, you can do anything in life.
Before saying this is a piece of cake, look around for a bit. Or, if you’re a Forex trader, check all the trading accounts you’ve blown so far. And, moreover, consider the future ones you’ll lose.
Statistically, retail traders lose their first deposit in the first six months. However, statistics stop here.
Reality has even more disappointing news. Very few retail traders make it in this world. Again, trading currencies is not for everyone. And, especially, not for every retail trader.
Reasons to Avoid Forex Trading
While every Forex broker will tell you to trade as much as possible, you should give it a thought first. If it is that easy, everyone can do it, right?
However, looking for financial independence from the Forex market comes with huge risks. Imagine some of the players you’re facing first:
– High-frequency trading algorithms that belong to quant companies. They have more money than you, more power, and don’t blink when losing/making millions in a second.
– Central and commercial banks. They have special trading departments that execute orders in the market. Multi-millions and billions of orders. They don’t care who’s on the other side of the market. They simply execute.
– Forex brokers. Most of the times these entities trade against you. When they don’t, they don’t have enough capital to provide access to the best liquidity providers. Hence, they’ll charge you extra via spreads and other fees.
Don’t believe everything you read/see in a commercial. Making money is a tough job for everyone.
Trading the Forex market for a living is even tougher. You’ll end up staying in front of the screen all day looking at the market going mostly against you.
Not to mention, when economic news comes out, trading algorithms go crazy and trigger stops all over the dashboard.
The moment you sell a position, the market goes against you, like a bad joke based on Murphy’s laws.
Lack of Funds
To trade for a living, you’ll end up comparing trading with a regular job. This is bad.
You can’t expect a paycheck at the end of each month. It so happens that the market will not move. Or, you’ll have a bad losing streak.
But hey, bills do come at the end of the trading month. So, either you have some spare cash for a year or so, or you’ll end up taking unnecessary risks. In the end, the market will come for you.
Lack of Experience
Most of the retail traders come without the basic knowledge about what Forex trading is. Not to mention, how to make it in the markets.
There are various programs out there. However, there’s no holy grail. Even the most sophisticated traders lose money.
Unless you simply look at trading as a hobby, you should hold on to your job. Don’t follow a crazy advice like quite your job to become a trader.
Think before you act. Look at the numbers and then think again. The hard truth is that you should avoid Forex trading by all possible means.