The Dos And Donts Of Trading Forex For A Living

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The Dos And Donts Of Trading Forex For A Living

Trading forex for a living from the comfort of your home is what many online investors aspire to do. Learn and adapt to the market and watch those profits soar.

There are as many naysayers as there are ‘fire your boss there is money to be made’ kind of people in the forex trading advice arena. But with daily trading volumes of over $5.3 trillion, anyone who has heard of this trade wants a piece of the pie.

The foreign exchange market also known as forex trading is where the big money boys come to play. Why? It is the largest financial market in the world immune to manipulation and incredibly liquid in nature. These characteristics are what has made it a gold mine for Steve Cohen, George Soros, and their ilk.

Can You Make A Living Off Of FX Trading?

Is trading forex for a living a pipe dream or is there a forex trading holy grail that can lead you to riches? Can you possibly obtain financial freedom and escape the rat race through forex trading? To begin with, learn an important truth from the naysayers ” the market will hurt you if you give it the opportunity.”

From the statistics, most forex traders do lose their cash. One of the pioneers of the retail forex market, FXCM features a scary disclaimer on their platform. They warn that 79.8% of their retail accounts end up in the red while trading. This may not make much sense in an era where trading forex for a living has generated so much interest.

The ugly truth is that more traders tend to lose more cash on their losing trades than they make on their winning trades. Nasdaq actually warns that within the first six months of trading, 90% of day traders will have lost their initial investments. Grim statistics aren’t they? Yes, they are but chew on this other statistic. According to DailyFX’s research 50% of forex trades close in again. That’s profit Y’all! There are pitfalls, yes, but there is an opportunity to make some income from forex trading. 

Basic Rules Of Trading Forex For A Living

  • Drop The Idea That This Is A Get-Rich-Quick Scheme
  • Far from it. It is a very unforgiving market. Look at it as an investment. Set your targets then get to a thorough analysis of the markets while giving yourself time to meet those targets.

  • Study Your Risk Tolerance.
  • How much market volatility can you tolerate? Forex trading is very volatile, and that coupled with the availability of leverage, your accounts can empty in a flash. Understanding your level of risk tolerance will assist you to come up with a long-term winning strategy. 

    • Be Careful When Speculating
    • DailyFX’s senior strategist David Rodriguez says that human psychology is often the cause of the huge losses experienced by traders. Most traders are easily excited over wins and rely too much on their intuition while executing trades. You can only trust your gut instinct after completed the four fundamental analyses listed here in the IDDA.

    • Get Schooled
    • While it is not rocket science, trading forex for a living is a science of sorts. Get a thorough education in the trade before jumping off the deep end.

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