The Forex is over $5 trillion a day market. Yes, trillion. No jocks!
Research shows that 90% of retail traders lose 90% of their account balance within 90 days. About 80% of the day traders quit within the first 2.5 years. 40% of the day traders quit after a month. Only 13% of day traders remain after three years and only 7% remain after five years.
Think about how good this business model is; a perfect one! Almost.
The simple answer is; Yes, retail Forex trades can make money. But it’s not easy. Retail trades need to follow the proper strategy and must do proper practice with patience.
Retail Forex traders make up about nothing percent of the $5 trillion markets. Usually, government, banks, and gigantic corporations move the Forex market.
Retails trades are not even considered as a remora fish which is attacked to a shark.
In fact, most retail traders lose money. This is a high degree of risk business.
Why Retail Traders Lose Money
Many Forex brokers reported that about 60-70% of their retails traders lose money within 6-12 months.
Almost 50% of the retail trades open the account to the Forex broker using the credit card. SO, you can imagine the motivation. knowledge and background of the trade.
No real trading strategy:
If you can learn how to manage risk, follow the proper strategy, and educate further about forex trading, you can make profits from the forex market or any market.
As a retail trade, do not forget that you are living with the shark and you need to go or attack in the same direction.
Here is the list of mistakes that beginner traders do:
- Holding the losing position for a long time in the hope that the trade will eventually work
- Search for fast profits
- Taking the position before the news release
- Trade after the new release
- Do not use stop lose
- Revenge trading
- Trading out of greed
Excessive leverage:
Almost all the bank and institutes trade without leverage. So there is no risk involved.
That means, of you, use 100:1 leverage, you risk 100 times higher than the risk of the bank
The risk to reward
Most of the traders lose money because they are risking more than 1% of their capital.
90% of the traders usually lose money in such a way that they still don’t understand how does it works and don’t follow the proper risk management.
Platform malfunction
Most of the brokers in the forex market don’t care about whether you win or lose Trades. Your broker is not your friend and you should not even think about using their tips and news source.
Before using any Forex broker please check whether this broker is regulated or not. your money will be safe in the regulated broker.
icmarket.com is one of the popular brokers out there. It’s a regulated broker as well as you need this broker usually provides the lowest spread compare to other brokers.
No information age
There is no way you can make profits consistently using any strategy that big players or institutions are aware of.
Do not believe anyone who claims big profits from the forex market. big players easily use sophisticated algos to make profits most of the time.
All the big players are aware of all the strategies forex market out there and they do not use dose strategies to make profits from the market.
In fact, did it against the strategies and make you lose to your trades.
OTC market
OTC market is not a centralized market and not regulated like the forex, stock, or futures market.
Do not take trade in the OTC market. There is no guarantee to make profits in the market.
In fact, most of the trader losers there are hard on capital to this market.
Iqoption platform provides the OTC market trading facility for a long time. You can test this marker at the weekend if you want to experiment.
Currency volatility
There are actually many people who are making profits from the volatility of the market. However, this is not easy to make profits from the volatile market.
In 2014, the volatility of the market was extremely low, that’s why that was a great year for traders.
Fraud and market manipulation
Market manipulation in a common way for the big players to make profits from the forex market. on the other hand, small retail traders are the victim of market manipulation.
You should be very careful about how the institute manipulates the market and when the institute runs there algoes to move the market.
Prerequisite to make profits from forex market
Only about 1% of all they are able to get predictable profits There are some prerequisite practices for the new retail traders if you like to make profits from the forex market.
Preparation:
Before profiting in the forex market, you need to practice for at least 6 months. Plus you need to set aside the investment money and the 6-12 months living expense. Do not quit your full-time job when you are learning.
You should not invest that amount of money that you cannot afford to lose. It does not mean that you will lose that money. Afraid of losing money leads to losing trades.
Passion:
If you really want to do this business, it should not be about the money, but because you have a passion for it.
You will experience frustration. setback and times when you just want to quit.
If you are here only for the money, Your motivation is not enough.
Treat like a business:
You need to accept the reality that becoming a professional trader literally takes years. And you have to take this as a business where you need to develop a certain skill-set.
You should research the market, improve yourself consistently, collecting as much data as you can and improve your trading strategy,
Mindset:
Think before jumping into this trading business, and you have to choose the right broker. icmarket.com can be the perfect choice because of the low spread and regulated broker from Australia.
You can make profits from the forex market like the other business, but a proper mindset is a must to become successful as a Forex trader.
As well as you have to spend a reasonable amount of time learning, practicing, making mistakes, and getting some experience before you go to actual trading.
Do not be emotional or romantic about trading. This business can eat your all saved money if your mindset is not right.
How, specifically, do you make money in forex?
If you want to be among the 1% consistent profitable trade, you need to follow some basic guidelines.
Forex trading is hard if you are using your emotion to take trades. On the other hand, Forex will become easy if you treat it like a business and spend some time or years on it.
Broker choice;
We recommend choosing a broker carefully. Sometimes broker manipulates the platform and your winning trade can be the losing trade.
Check the broker if that broker is regulated or non-regulated. You have to choose a regulated broker to get into this business.
Discipline:
Mindset and discipline are the primary reason for the 90% trade losses of the retail trades.
When they lose money and lose 1-2% of the capital, the next trade newbie takes as a revenge trade to get back the capital with a higher lost size. Eventually, they lost most of the capital by this kind of trading.
Forex is accessible 24 hours a day, 24/5 days a week. You have no employee, no payroll, no billing, or no politics. But you have to be disciplined.
Choosing the right time, session, sticking to your strategy, and not trade emotionally will make your professional trade.
This might be a straight answer, but this is the truth! patience and hard work are what will make you money from the forex market.
It is not an easy path to riches but the path does go there and of you have the journey in you, you can go there too.
Practice:
There are so many profitable trading strategies out there. You can learn any one strategy if you do not want to develop any strategy.
You need to spend at least 6 months of practicing that strategy until you mastered it and follow the proper trading plans and do not break the system.
Almost all the broker provides a demo platform to practice. The most common platform is the mt4 platform.
When you start with the real account, start with a small balance account that you can afford to lose. there are many brokers out there where do not require a minimum deposit. You can choose any one of them.
The emotional and mental effects you will experience in real trading which you cannot learn anywhere. Almost everyone experiences differently, and you will learn a lost yourself through this.
Master the mind game:
Forex trading is definitely a person thinking game. You need to identify patterns, channels, and many other technical things. And this identification very person to person.
The more you accurate on that game the more money you can make form the market,
There is no difference in whether the market goes up or down, you can make profits if you can assess the market properly.
Do not over trade:
You will get great results if you do not do over trade. Almost 50% of the trade loses their money because of the over trading for greediness.
Statistics show “1963 and 1993 the stock market was opened using 7,802 days. During that period 96% of the stock market’s gains come from just 90 of those 7,802 days.”
Risk management:
Having proper risk management is one of the vital factors to be a profitable trader.
Most of the profitable traders do not usually risk more than 1% of their capital. 0.5% of the capital is the best and safest practice.
Always use a proper stop loss. Do not take any trade without the proper stop loss. Your account might be wiped out because of not having stop loss to your trades.
Use fundamentals
You need to consider fundamentals as well. News moves the maker more than the algoes.
You need to check out if there is any news of the currency pairs before taking any trade.
for the time being, you can also understand that certain news can be a positive or negative effect on the currency pairs.
You can check the forex factory for a new update which is the most popular in the forex community
Use technical:
You have to have a proper trading plan and strategy. Without the strategy, you should not go to live to trade.
No one can make long term profits only depending on the fundamentals. You need to combine fundamentals and technical to be a consistently profitable trader.
Create your own trading strategy:
After all the necessary steps and mindset, you can create your own trading plan and trading strategy. Always follow money management and your system.
It is also advised that you take the time to practice the trading strategy before investing the money.
We recommend choosing a max of 4 pairs if you are new. Getting to know these pairs’ patterns, price action will increase the profitability of your trading.
Can you trade from living?
Yes, you can. The main issue is that most people believe in hype and get reach quick hype.
The only way to make profits from the forex market:
- Invest the money that you can afford to lose.
- Just like other skill, you need to give time to learn and develop your own style
- Need to have realistic expectations
- Stat learning from basic. You can find many free resources online. If you can stick to 4-6 months of learning, it can create a huge difference.
- Calculate how much you are risking for each trade. And do not risk more than 1% in a single trade.
- Follow the fundamentals as well as technical analysis
- Always use stop loss and do not involve emotionally in the trade.
- Practice, practice, practice!
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