Is Forex trading hard? Is Forex a difficult Market? (2024)

Is trading Forex hard? If you are serious about finding an answer to that question, start with this single number: 6.6 trillion U.S. dollars. According to the Bank for International Settlements, the daily volume traded in the Foreign Exchange market hit this number in 2020, its highest level ever.

Now imagine, with a daily volume of 6.6 trillion dollars in transactions, how many players should the Forex market have? Perhaps millions. Is Forex not about the exchange of money between different currencies all over the world? Yes, it is.

So, we can say that the FX industry is the world's biggest financial market, and it is influenced by what goes on in just about every other major financial market. So, is trading Forex hard? It certainly can be. Many Forex traders would also say that it is quite easy to trade Forex. This is because you do not have to outwit all the large and sophisticated institutions, you just have to ride the waves they create with enough discipline to beat your Forex broker.

Why is Trading Forex Hard?

Is Forex trading hard? Is Forex a difficult Market? (1)

The Forex market is said to be hard because it is the most liquid market in the world and billions of people and entities intervene in it. Governments, politics, the weather, public health, corporate expansion or bankruptcy, the prices of foodstuff, everything influences the Forex market.

Some big players in the market are so huge, players can generate large movements on their own. How does this affect you? Well, consider this sequence of events as an example. Suppose you have initiated a Forex trade, which after several hours of hard work, is proceeding in your intended direction as planned. You decide to take a break and maybe even brag to your partner about your latest success.

After 10 minutes or so, you return to your trading station only to discover that a massive reversal has occurred, completely obliterating your position including any potential profit. This type of event can frequently happen with no prior warning of any sort.

How Long Does It Take to Learn Forex?

In Forex, the best chance you have to survive long enough to make any profit is by carefully managing your risk to ensure you don’t get wiped out, while you build experience and knowledge from real money trading (after spending an initial period of time practicing with a free demo account). According to experts, beginner traders should trade only demo accounts for at least six months of relatively profitability before reassessing.

Even if you do achieve six months of relative profitability, you should keep learning and practicing new strategies, skills, and styles. The old saying that it takes ten thousand hours of practice to become an expert at anything also applies to trading Forex. Simply because you make a profit during your first six months of trading does not necessarily mean that you are likely to be able to keep it up. There is a lot to learn and it is not even really a question of information, but more that after watching prices move through many different patterns over many different trading sessions, you can begin to develop a kind of sense which tells you what is most likely to happen next. Note that I wrote “most likely”: this is always the best level of accuracy you can hope for in trading. The good news is that this level of accuracy is enough to be profitable.

In simple terms, no Forex trader ever really stops learning. The good news is, you just need to be a competent Forex trader to make money, you do not need to be among the best in the world. Happily, there are also several different ways to trade Forex successfully, and your chances of success will improve if your methods suit your mental style. If you don’t know yourself psychologically, you might it takes you longer to learn Forex than someone else who knows their own mind better, because you will need a longer period of experimentation to find out what works best for you.There is always plenty of data, online courses and free forex ebooks available on the Internet.

What Should You Know to Trade Forex?

Every single trader, beginner or experienced, should follow Forex basic rules to become and remain a successful trader. The checklist below runs through the most important rules.

Practice with Demo Accounts

Always start with demo accounts, also known as paper money accounts. A great many brokers offer free demo accounts to anyone, requiring neither deposit nor commitment. You can use a demo to test your strategies, understand market synergies, and even to get to know your trading platform. Never try Forex robots using real money without testing them on a demo account first.

Stick with Your Trading Plan

Design a trading plan and follow it. All trading plans should have entry and exit points, risk-reward calculations, & an emergency door to close the trade if the market goes against you. So, always have an entry point, profit taking levels / exit strategy determined in advance, and a hard stop loss for every trade.Make sure, your trading plan considers the daily Forex trading signals.

Choose the Right Broker for You

Choose your broker wisely and remember that you should not adapt to them. It is the Forex broker that should adapt to you. There are hundreds of brokers out there, so pick the one that fits what you want. Important criteria to keep in mind for your new broker shortlist include trading fees, low latency, efficient deposit and withdrawal processes, a reliable platform, and solid regulation.

Risk-Reward Ratio

Every trade should provide you with a decent risk/reward ratio. Some experts say that a good position offers you at least three pips of potential profit for each one that you are risking. It is also not recommendable to risk more than 10 percent of your portfolio in a single trade under any circ*mstances, as evidenced by the maximally aggressive Kelly criteria formulation for the most profitable theoretical position sizing. Most traders keep position sizing at well under 2% and more cautious traders at 0.25% or even lower.

Control Your Emotions

As it is well known that location is key in real estate, something similar applies to Forex regarding psychology. Heathy psychology and control of emotion are fundamental requirements for profitable Forex trading. Cut your losses quickly and let your profitable winning trades run as long as they continue to show positive momentum. The best way to achieve that is by following a suitable trading plan.

Is Trading Forex Hard or Easy?

This is a question only you can answer, for yourself. The answer is related directly to what kind of person you are. Forex trading will be easy for you if you are a patient, unexcitable, analytical person who can spend a lot of time thinking on your own without getting overly excited or depressed about good or bad fortune. The further away you are from this temperamental and skill-based model, the harder you are likely to find becoming a successful Forex trader.

FAQs

Can I trade Forex with $100?

Yes, you can start trading with $100. Most brokers require minimum deposits of $100 or less. You do not need to start with millions of dollars to be a profitable or successful trader, but it will obviously take you more time to make significant amounts of money the smaller the amount of capital you have available to start with.

Is it easy to trade Forex?

It all depends on you and the effort you are willing to put into it. Trading forex will be easier if you follow some basic rules, such as having a trading plan, managing your psychology, having a reliable trading platform, and learning every day.

Is trading Forex easier than stocks?

Forex is usually much less volatile than stocks, and there is not really any long or short. Trading costs can also be relatively very low. For these reasons, many people find Forex trading easier than trading stocks, although the mostly bullish stock markets over recent decades arguably hand an advantage to long stock traders.

How long does it take to learn Forex trading?

Forex requires the discipline to keep learning and training always. The market evolves every single day, and traders should do too. However, experts suggest that you trade six months in a demo account and prove yourself to be profitable on paper before going live and risking any real money.

Is Forex trading hard? Is Forex a difficult Market? (2024)

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