Many people say that the forex market is a niche segment and that the strategy for successful trading is a well-preserved industry secret. However, with the arrival of the internet and thousands of dedicated resources on forex, it is hard to believe this statement. Search for forex strategies on Google, and you will be bombarded with hundreds of search results. But, one cannot deny the fact that only a fraction of the forex traders make it big in this market – where money breeds money. So what is the catch?
Forex Trader Secrets: Analyzing Your Personality
Being a forex trader, you can read several books by expert authors. They will teach you trading strategies, handling currency pairs, fixing positions, and understanding market trends. What they cannot teach you is to develop a trading pattern that suits your personality. Defined theorems do not govern forex trading. It is highly dependent on the reactions of the traders to major economic outbreaks. This psychological quotient of the market requires you to develop an individual trading strategy that is well suited to your personality.
Forex Trader Secrets: Pulling the Trigger
Another major factor that haunts forex traders is the fear of putting money at risk. The forex market is very similar to the game of football. Suppose a football is fortified in terms of its defense to an extent where it has no attacking line – in such a scenario, the team may defend all the goals, but there will be no player to shoot a goal on the other half of the field. Similarly, being highly defensive does not actually pay off in the forex market. You have to bite the bullet and put your money at risk to enjoy greater profits. This rule applies to making an entry or exit in the trade.
It also holds valid in the situation where a position is earning well. A defensive trader tends to close a winning position to avoid risks. However, an informed trader will know what the correct time is to exit.