The truth is that the foreign exchange markets are a traders dream in the same way that Las Vegas can be a gamblers dream. It's open 24 hours 6 days a week, so there's always action and there's always a trade that can be made. But just like Las Vegas it can quickly turn into a nightmare.
The truth of the matter is that it is difficult making money in forex and it is even more difficult making money consistently by day trading the forex markets. The reason being that most people cannot think quickly and calmly enough to make the split second decisions needed to be successful at day trading. In his book Blink, Malcolm Gladwell details a computer generated war simulation competition set up between day traders and battle field generals. Surprisingly the day traders faired quite well against the battle-hardened soldiers at making split-second decisions that could cost thousands of simulated soldiers their digital lives. If you regard your trading capital as your soldiers and the goal is to go out and capture the enemy soldiers or other people's capital, then the analogy is a pretty good one. Not surprisingly the two groups got along quite well with one another after testing their mettle on the digital battlefields. What they found is that to be successful in either profession required a similar set of skills, namely being able to make split second decisions, the ability to take in and process lots of information at one time and disregard extraneous unimportant information, and obviously the ability to deal with pressure calmly and cooly. Most people lack these requisite skills to be successful as day traders.
Swing trading is a much easier and less stressful way to get into the markets, and you won't even have to sit in front of your computer screen for hours at a time watching indicators and squiggly lines. It's a gentler pace in which the trader can set limit, or stop orders and wait for the markets to come to them. In addition instead of having to make decisions at such a frenetic pace a swing trader can be more thoughtful and deliberate in the process.
There is money to be made in the forex markets, but it is not for everyone. If you are going to tempt these treacherous waters there are a few things that you should know first-
1.Have a well thought out trading plan, preferably one that has been back tested and has some statistical significance.
2.Make sure to use stop losses and you should also use a trailing stop loss
3.Don't use the rent money to trade with, or other money that you need to pay the bills. If you do then you will always make bad decisions.
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