“High Risk High Return” - And Forex traders or new users get carried away
towards the high return belief and ignored the risk factor attached to it. In a
recent survey made on Forex account opening some facts is revealed which says 91%
of Forex account opened is closed down in first 3 to 6 months, so does this
means only 9% of retail Forex traders actually trades or makes profit? No, this
means a fresh mind is losing interest in trading due to lack of knowledge or is
it due to wrong selection of Forex brokers who have misguided just to open up
real Forex trading account.
Five most important things
that one ignores before opening a Forex trading account or while selecting a
Forex brokers for trading
•
Little information
is always dangerous and leads to devil’s home: A well said quote which
justifies here, as mostly Forex brokers gives little or basic
knowledge about Forex trading and encourage new traders to open Real Forex
Account for trading. This results in trades falling in margin call in very
initial stage. Only “Forex Trading Education” can solve this, so always take full training of Forex Trading from Forex brokers if the
facility is availed to you.
•
Frequency of Trades: The
more trades you place the more money you will lose, no Forex broker is going to stop you as they are interested in
commission they are getting from your trades. The equation says “High Risk High
Return”, but that does not say frequent or regular trades. A wise trader would
always be in search of a better trading opportunity for profit making as trading
itself is a risk and returns are high profit that you make using right tactics.
•
Dealing Desk:
Always go for a Forex brokers that
does not offer dealing desk. The reason why one should not trade with dealing
desk option, as in that case brokers may use dirty techniques or tricks to
screw up your Forex trading account for sure.
•
Term about Trade Execution - Pay
special attention to Terms and Service. Most brokers fill your entry offers and
that too at worst possible price. It has been observed that most of traders
missed their profit but do hit stop loss and this mainly happens during any
financial news release are in line for e.g. at first Friday of every month when
US Farm payrolls are declared during
NYSE trading session.
•
Variable Spread: A
spread is the price difference between ask and bid usually the spread for
EUR/USD pair is 2 pips for most Forex brokers. Most brokers’ follows variable
spread method and they usually don’t disclose or guaranteed about how wide spread
could become. What they disclose in Terms and Condition is “Under normal market condition we offer 2pip spread for EUR/USD
currency pair”. And the funniest thing is that there is never Normal
Market Condition as market is full of uncertainty. So it would be a nice
practice if things related to spread are cleared well in advance.
If one follows right approach for Forex trading, then
anyone can make a lot of money from this real exciting world of Forex Trading.
I hope this would bring some light in preparing yourself with right tactics
About Author:
M.
Azeem, CEO – Readyforex.com is a trader specialized in currency trading, his
main purpose is to provide a better connectivity with leading Forex brokers and educational
videos related to Spot Forex trading and trading courses.
