risk

Why is Forex risky?

Forex is often label as highly risky and something of a gamble. And at AlpsSocial, we agree that it is extremely risky for amateurs, who lack the basic fundamentals and turn toward gambling.

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The main problem with the amateur trader is that they all have this naïve mindset that you can make a lot of money in a short period of time. Lured by greed, they jump into trading without sufficient knowledge/information.

 

When making a trade, there are commonly three types of traders: The first type would trade the market base solely base on “I think” without any reason. Similarly the second type would trade the market base on “I think” but give an excuse or a reason for it. One ridiculous excuse that I’ve ever heard was “because price went up yesterday, it must be coming down today”. The last type would make a trade base on technical reason (price action/charts) or fundamental reason that relate to the current news/economic, and even so they know it still might be wrong.

 

Never hope or guess on news or market price, trade what you see and know to increase the probability on each trade, as well as sitting out on trade that you’re unsure of. Forex usually gets higher leverage when compared to other financial instrument, it enables traders to trade position much larger than their actual capital. This means that you’re essentially borrowing money from a broker to trade, therefore with poor money management, leverage can be a double-edged sword if one doesn’t control his/her risk. This is why we often hear about people losing a lot of money within hours or a in a day and associate forex as high risk.

 

Then there are also unethical brokers out there that trade against you, slightly adjust prices to make you lose and reluctant to allow withdrawal of your profit. It’s crucial to research on a broker before using them.Try the best Birmingham escorts rignt now

 

Forex has its fair share of risk but the decision made by the trader often increases the risk. There are free forex course all over the web and one can easily pick up the basics with enough time and effort. Start by trying out a Demo account (trading with fake money) before jumping into it, else there’s no difference from gambling.

 

Do check out AlpsSocial – IdeaCentral for more trading guides and tips. https://www.alpssocial.com/ideacentral

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