Forex Trading – The Modern Day Goldrush
There is a modern day goldrush going on right now, and it is not limited to just the USA. continentside areas are becoming flooded with gold, and most of them are looking for Settlements or Trade Towards Prosperity. Though Sevenses has a high priority as they are the commodities that are being sought after, but Settlements, or Trade towards Prosperity is going on throughout the world.
Eurozone has already seen millions of euros being turned over to banks for interests in forex (Foreign Exchange), while in the United States; interest rates are at all-time lows and economy is in turmoil, forex is safe. But, there are areas where forex isn’t so safe, while the real estate market is in a state of extreme disinvestment and those owning homes are in a state of extreme buyer’s rebound.
Over last couple of years there has been an explosion in forex trading, well it’s been a predictable phenomenon. The inevitable result of Increasing CurrencyDis pains is Simple, while the opportunities that forex trading will bring is exponential.
Forex trading has become easy, but it has become increasingly difficult to make money as is. That is because forex traders and aspiring forex traders are victims of the extreme ratio of winners to losers. Just 5% of forex traders are successful and make money, while 95% are not. While the winning 5% are becoming more and more profitable, the 95% are not.
There are some rules that can help the new traders, and one of them is asking really do they want to trade forex. It is an extremely volatile market, and one can literally lose everything in just a single trade. The most important aspect one should remember is being extremely patient and staying focused. The reason why people stay too long in a trade is because they are unable to withstand the emotional roller coaster ride and panic. Stay to your plan and see the market for what it is, a market that is extremely volatile and unpredictable. The most important thing is to exit a trade when your system tells you to. One thing that has always remained to be a constant in forex trading is that eventually, you will make money whether the market goes up or down.
An interesting feature of forex trading is that day traders usually don’t last too long. Overall I have found that long term traders ( 1992 study) make money less than 40% of the time. So the longer you are in it, the more important it is to cut your loses short and let profits run.
Another feature of forex trading is that winners and losers have a different experience of the markets. While overall be more secure with your trades, there will be winners and losers every time. One group of people don’t mind taking risks and are comfortable in the fact that they will win from time to time. These group of people are the risk takers and do not mind the fact that they might have to take a few risks to make the returns worthwhile. These are the traders who can stay in the market for days. weeks or even months.
Conversely, there are many losers who are completely comfortable in where they are and where they are comfortable. These people are the stay at home traders. They stay at home trade and are basically gamblers who are comfortable with the fact that they will lose money as long as the amount invested is significant enough. These people are the ones who stay at home invest and let their profits run. And these are the people who are generally beaten in the market.
If you are the type who doesn’t mind taking risks and doesn’t have a problem with the idea of winning ones way, then it will be an ideal market to trade. The basic characteristics of the forex market are margin requirements of 100 and history of liquidation, which means that required margin is quite small. The entire market is about 5 trillion dollars which makes it far from being a very intimidating market.
The reason of why this market is ideal is because of its long trading hours. Its all day trading and essentially allows anyone to trade at any given point of time. Some traders will trade the whole day and come home with a profit, other traders will look for every minute opportunities and will only trade when there are signs that the market might go in their way. For these types of traders foreign exchange is a great way to get into the market.
The day traders have a lot of risks to overcome when trading the foreign market. Once a trend reverses the trader can only hope to ride the trend in the hope that it goes back before it continues back again. The problem is that the market continues to trend and the small scale traders are taken out of the market way before they had a chance to turn a profit.
There are a number of ways a trader can take advantage of the 24 hour market.