Why Forex Trading Is Hard?

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Forex trading is a really difficult activity. In my opinion, forex trading is even a lot harder than stock trading. There are several things that makes forex trading hard. Read the full article to learn more.

Why Forex Trading Is Hard?

There are 4 factors that makes forex trading hard. I called these 4 factors : L.O.V.E.

1. LEVERAGE
In normal condition, trader need a lot of money to trade forex. Fortunately, broker can lend trader a certain amount of the money needed to trade forex. Thus, your initial capital is leveraged. That means, you can trade bigger money than deposited capital. Using bigger amount of money means you can make bigger profit, but also means you can get bigger losses. Bigger amount of money makes it hard manage and affect your psychology deeply.

 

2. OVERPLAYED
Unfortunately, in forex market you're playing against the big player such as central banks, big institution with more resources, experience, and money than you. Sometimes, trading moves from big player can make market fluctuates heavily. Are You Ready To Play The Trading Game?

 

3. VOLATILITY
Volatility in forex trading refers to the amount of fluctuation in changes in a currency exchange rate. Forex tends to have very high volatility compared to stocks. Higher volatility means higher uncertainty or risk involved. If no careful, you can easily blew up your trading account when volatility rises.

 

4. EXPERTISE
This is the only factor you can control as individual forex trader. You need to have enough trading skills to make money in forex. Not only analytical skill like Technical Analysis or Fundamental Analysis, but you also need to have a complete Trading System, accompanied with solid Money Management and Trading Psychology. Building forex trading expertise is a long and time consuming process. Having excellent trading skills doesn't mean you will always make money. There are times you are losing money because of unpredictable market volatility or big moves from big player.

Why Forex Trading Is Hard? Because of Leverage, Overplayed, Volatility, Expertise


Trading is simple, but not easy. In fact, trading is hard. But, becoming a successful forex trader is not impossible. You just need to be patient, and learn a lot.

Hope this article inspires

by
Desmond Wira
http://www.bigwinforex.com