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Have you ever thought of trying Forex Day Trading, and learning the tricks of the trade from the very best? This article attempts to explain why forex trading is such an interesting concept, and why day trading in particular is so fast an exciting.
Generally the Forex market offers opportunities and technical setups that to the untrained eye, can be impossible to spot. Furthermore, the new trader just doesn’t know the differences from one currency pair to another, the presence or absence of liquidity, and the presence or absence of particular factors that may turn the daily trend upside down!
But knowing how to spot those, does make all the difference!
Common facts and myths about the Forex market that most new traders don’t know:
- Leverage is a good thing that increases buying power – False! Leverage can also create unnecessary big paper losses that will get you stopped out too soon, causing you to miss the trend. Leverage actually causes more problems than does good, no more than 100:1 is ever required.
- Trading forex can make easy millions – False! Professional bank forex traders do make millions, but they also get paid in millions, why would you pay millions someone who does an easy job?
- Anyone can catch the daily forex market moves - True! Given the right education and trading mentoring program, anyone can indeed pass the problems associated with forex and become a news-proof day trader.
Forex day trading attempts to deal with the intraday market fluctuations, but let’s be realistic here, attempting to catch a 60 or even a 150 pip movement that you being setup on the charts is often harder than it seems! Bear in mind that charts alone are not enough in order to figure out market direction. Only the educated mentors of few and well established trading and trader-mentoring firms have the experience to read these technical charts, as well as other data and make sense of it all!
I remember when I first started trading forex, I was very excited. I did have a few winning trades that made me want consider forex trading much more seriously!
I made more than $400 in 3 days, way more than my day job paid, and certainly this excitement made me behave irrationally. I used no trading mentoring services, not an analysts opinion, only a public opinion poll.
As crazy as it may sound, all I did believe in, was that public opinion poll, after all it had been proven right, time and again. But that suddenly changed, and that’s when I started losing money day trading the forex markets. Then my whole trading method just fell apart, nothing seemed to work anymore, my ‘winning’ system had only lasted for a week or so, then market conditions completely overpowered it.
So now, I have come to realize that there is so much more to trading than just a quick glance at a price chart… The only way to really know when public opinion is right, when is wrong, when the central bank will be right, or when even the central bank can be wrong is to perform extensive market analysis, before the trading day! Good forex traders have learned techniques from their own mentors to do that, and I assure you they know beforehand how much money the markets will allow them to make on that day. Even thought the forex markets appear to be setting up for a 200 pip move tomorrow, you can only really catch 40% of it. Try catching more, and you will lose! But why risk more? If the mentors tell me that these 80 pips will be during the time of the best liquidity and volatility, that’s all I want! I will trade on these 80 pips with more money, I will still make $200 on that day even though I will have ‘missed’ 60% of what appears to be a tradable move.