So you’ve decided to try your hand at the forex market, and although you’ve done some research on the topic, you’re still not quite sure what to expect. This is a common problem faced by novice traders because many forex articles are stuffed with filler and don’t really provide a great deal of insight into what it’s like to be trader or what you should expect to gain by becoming one. With that said, here are four things everyone should know before participating the forex market:
1. The Market is Open 24 Hours, But There Are Best Times to Trade
While you’ve probably read that the forex market is open 24 hours, it’s important to note that most trades take place during trading hours. There are four separate forex markets around the world – New York, Tokyo, London, and Sydney – each with their own open and close hours. Between 8:00 AM to 12:00 PM the London and New York sessions overlap each other, so these are the busiest times of the day. If you’re aspiring to become a forex trader and are trying to devise a work schedule, it would be wise to become familiar with the forex trading time sessions first.
2. You’re Not Going to Get Rich Quick
Many people hear the term “day trader’ or “forex trader” and immediately associate the occupation with wealth and prestige. The fact is, most forex traders already had some funds saved up before they got into trading, so if you’re looking for a reliable career that is going to launch you from poverty to filthy rich in a few months, forex trading is not it. If, on the other hand, you’re looking for a way to invest and grow your savings on a daily basis, and are willing to put in the hard work to become proficient trader, then it’s probably worth your while.
3. You Need to Be Emotionally Mature and Patient
It’s no secret that only about 10% of forex traders are actually making consistent profits and decent income in the forex markets. The other 90% are mostly inexperienced traders looking for ways to supplement their day job income or overzealous traders who keep fuelling themselves with the occasional wins despite taking a loss overall. Now, 10% might seem like an elite group of traders that you could never become part of, but when you consider the number of people entering and leaving the market each year, really all it takes is some persistence, research (especially regarding the main reasons traders take losses), and intelligence to become part of the minority that has figured the system out.
4. Going Without Tools and Services is Like Setting Yourself Up for Failure
Some traders try to take the old-fashioned approach and do all of their trades and research manually, without relying on any third-party tools, resources, or services for help. While this approach might work for a highly skilled professional with years of experience under their belt, it’s almost a sure fire way to lose money as a new entrant in the market.
If You’re Looking for an “Easy” Job, This Isn’t It
A lot of people think ”Hey, I get to stay at home making trades all day, how hard could it be?” While it’s true that conducting trades is easy, consistently choosing trades that are profitable is where the challenge comes in. If your goal is to be a successful trader, plan to study even more than you trade.