Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

tmbaru

Why Succeeding in the FOREX Market is So Challenging

Recommended Posts

Forex market is one of the vibrant markets in the world and also one of the most challenging. Trading in currencies is a risky affair and not all investors can suit this market. If you are considering plunging into this market you need to possess the necessary skills to enable you trade successfully or be willing to master the art of trading in the Forex market. Before we delve into the reasons why succeeding in the Forex market is a daunting task, let us have a sneak preview of the Forex market.

1. The daily operations of the Forex Market are equivalent to $ 3.9 trillion

2. The market is highly liquid as a result of huge trading volumes

3. The market is geographically dispersed

4. Operates around the clock save for the weekends

5. There is an array of factors that affect currency exchange rates

6. Individuals from all facets of life can trade in the Forex market as long as they have what it takes to trade in currencies

Making money in the Forex market is challenging and risky but can be done. In Forex market to make substantial profits, you buy a particular currency at a low value and then wait for it to appreciate so that you can sell it at a higher value. The risky part is when you buy that currency and instead of the value appreciating, it depreciates. This means that you are going to lose the money you had invested instead of earning returns on your investment.

 

Why people fail in the Forex Market

Lack of Proper Planning

 

There is a common saying that failing to plan is planning to fail. This holds water in the Forex market because if you fail to plan your trading properly then your chances of succeeding are minimal. To avoid losses stop to hastily dive into Forex trading without proper planning. Take time and prepare and plan adequately for what lies ahead in the market before investing your time and money in the market.

Poor Money and Risk Management

 

Proper money and risk management is crucial to succeed in the highly volatile Forex market. Currency rates can swing in one direction in a moment and in the next moment they are swinging in another direction. Therefore, poor money and risk management will see you lose a lot of money in the market. It is of paramount importance that you limit your downside by using stop-loss points always and as well trade only when good trading opportunities arise.

 

Other ways you can mitigate risks while trading in currencies is by utilizing a number of different indicators, placing stop-loss points at the closest resistance levels as well as utilizing trailing stop losses to lock in profits as well as limiting losses when the trade turns favorable. When you master the art of money and risk management you will significantly increase the rate of succeeding in the Forex market.

Failure to Identify the Entry and Exit Points Properly

 

Things that you should know as a trader when you are looking for entry points:

When the market is Bullish then;

1. Trend lines should breakout upwards

2. RSI, MACD and Stochastic should have positive divergences

3. Strong (close support and weak) distant resistance

4. Bullish candlestick engulfing

When the market is Bearish then;

1. Trend lines should breakout downwards

2. RSI, MACD and Stochastic should have negative divergences

3. Strong (close resistance and weak) distant support

4. Bearish candlestick engulfing

 

It is a great idea to place exit points, take profits and stop losses, before placing your trade. The exit points should be located at strategic levels and should only be modified if there is major change in the market that will affect your trade. Some of the strategic levels where you can place exit points are; just before areas of strong support or resistance, just inside key trend lines or at key retracement levels.

 

Though Forex trading is challenging if you perfect some of the things discussed above you can make good returns at the end of the day. You also need to exercise patience and ice-cold discipline while trading. Remember, Rome was not built in a day and you also need time to trade profitably in the Forex market.

Share this post


Link to post
Share on other sites

Though Forex trading is challenging, Learning, researching, reading and understanding the basics and, later on, the depth of Forex trading, will boost your authority status and increase your success rate.

Share this post


Link to post
Share on other sites

Excellent post covering the main points of FOREX.

 

Should also add that the geographical dispersion means that local politics of all the countries in the world can also have a huge impact on trading. For most people, it is very difficult to keep track (and to understand the consequences) of events happening halfway across the globe.

 

Unlike stocks (which are usually local companies/multinationals), FOREX requires a lot more research and a lot more awareness of political events.

Share this post


Link to post
Share on other sites

Jenny, FOREX requires a lot more research and a lot more awareness of political events...this entails fundamental analysis which is also an integral part of Forex trading

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • Date: 1st April 2025.   Will Gold’s Rally Hold Strong as New Trade Tariffs Take Effect Tomorrow?   Gold continues to increase in value for a sixth consecutive day and is trading more than 17% higher in 2025. Amid fear of higher inflation, a recession and the tariffs war escalating investors continue to invest into Gold pushing demand higher. The trade policy from April 2nd onwards continues to be a key factor for the whole market. Can Gold maintain its upward trend? Trade Policy From Tomorrow Onwards Starting as soon as tomorrow, a 25% tariff will be imposed on all passenger cars imported into the United States. While this White House policy is anticipated to negatively affect European industrial performance, it will also lead to higher transportation and maintenance costs for everyday American taxpayers. The negative impact expected on both the EU and US is one of the reasons investors continue to buy Gold. Additionally, last month, President Donald Trump announced reciprocal sanctions against any trade partners that impose import restrictions on US goods. Furthermore, tariffs on products from Canada and the EU could increase even more if they attempt to coordinate a response. Overall, investors continue to worry that new trade barriers will prompt retaliatory measures, particularly from China, the Eurozone, and Japan. Any retaliation is likely to escalate the trade conflict and prompt another reaction from the US. Experts at Goldman Sachs and other investment banks warn that this will lead to rising inflation and unemployment. They also caution that it could effectively halt economic growth in the US.   XAUUSD 1-Hour Chart   The Weakness In The US Dollar Another factor which is allowing the price of XAUUSD to increase in value is the US Dollar which has been unable to maintain any bullish momentum. Despite last week’s Core PCE Price Index rising to its highest level since February 2024, the US Dollar has been unable to see any significant rise in value. Due to the US Dollar and Gold's inverse correlation, the price of Gold is benefiting from the Dollar weakness. Investors worry that new trade barriers will prompt retaliatory measures from China, the Eurozone, and Japan, potentially escalating the conflict. Experts at The Goldman Sachs Group Inc. believe that such actions by the US administration will drive rising inflation and unemployment while effectively halting economic growth in the country. Can Gold Maintain Momentum? When it comes to technical analysis, the price of Gold is not trading at a price where oscillators are indicating the instrument is overbought. The Relative Strength Index currently trades at 68.88, outside of the overbought area, since Gold’s price fell 0.65% during this morning’s session. However, even with this decline, the price still remains 0.40% higher than the day’s open price. In terms of fundamental analysis, there continues to be plenty of factors indicating the price could continue to rise. However, the price movement of the week will also partially depend on the employment data from the US. The US is due to release the JOLTS Job Vacancies for February this afternoon, the ADP Non-Farm Employment Change tomorrow, and the NFP Change and Unemployment Rate on Friday. If all data reads higher than expectations, investors may look to sell to lock in profits at the high price. Key Takeaway Points: Gold’s Rally Continues – Up 17% in 2025 as investors seek safety from inflation, recession fears, and trade tensions. Trade War Impact – New US tariffs and potential retaliation from China, the EU, and Japan drive uncertainty, boosting Gold demand. Weak US Dollar – The Dollar’s struggle supports Gold’s rise due to their inverse correlation. Gold’s Outlook – Uptrend may continue, but US jobs data could trigger profit-taking. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Michalis Efthymiou HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Date: 31st March 2025.   Trump Confirms Tariffs on All Countries, Sending Stocks Lower.   The NASDAQ continues to trade lower due to the US confirming the latest tariffs will be on all countries. In addition to this, bearish volatility also is largely due to the higher inflation data from Friday. The NASDAQ declines to its lowest price since September 11th 2024. Core PCE Price Index - Inflation Increases Again! The PCE Price Index read 2.5% aligning with expert forecasts not triggering any alarm bells. However, the Core PCE Price Index rose from 0.3% to 0.4% MoM and from 2.7% to 2.8% YoY, signalling growing inflationary pressure. This increases the likelihood that the Federal Reserve will maintain elevated interest rates for an extended period. The NASDAQ fell 2.60% due to the higher inflation reading which is known to pressure the stock market due to pressure on consumer demand and a more hawkish Federal Reserve. Boston Fed President Susan Collins recently commented that tariffs could drive up inflation, though the long-term impact remains uncertain. She told journalists that a short-term spike is the most probable outcome but believes the current pause in monetary policy adjustments is appropriate given the prevailing uncertainties. Although, certain investment banks such as JP Morgan actually believe the Federal Reserve will be forced into cutting rates. This is due to expectations that the economy will struggle under the new trade policy. For example, JP Morgan expects the Federal Reserve to delay rate cuts but will quickly cut towards the end of 2025. Market Risk Appetite Takes a Hit! A big factor for the day is the drop in the risk appetite of investors. This can be seen from the VIX which is up almost 6%, Gold which is trading 1.30% higher and the Japanese Yen which is the day’s best performing currency. Most safe haven assets, bar the US Dollar, increase in value. It is also worth noting that all indices are decreasing in value during this morning's Asian session with the Nikkei225 and NASDAQ witnessing the strongest decline. Previously the stock market rose in value as investors heard rumours that tariffs would only be on certain countries. This bullish swing occurred between March 14th and 25th. Over the weekend, President Donald Trump indicated that the upcoming tariffs would apply to all countries, not just those with the largest trade imbalances with the US. NASDAQ - Technical Analysis In terms of technical analysis, the NASDAQ continues to obtain indications that sellers control the price action. The price opens on a bearish price gap measuring 0.30% and trades below all Moving Averages on all timeframes. The NASDAQ also trades below the VWAP and almost 100% of the most influential components (stocks) are declining in value.     The next significant support level is at $18,313, and the resistance level stands at $20,367.95. Key Takeaway Points: NASDAQ falls to its lowest since September 2024 as the US confirms tariffs on all countries, adding to inflation concerns. Core PCE inflation rises to 0.4% MoM and 2.8% YoY, increasing the likelihood of prolonged high interest rates. Investor risk appetite drops as VIX jumps 6%, gold gains 1.3%, and safe-haven assets outperform. NASDAQ shows strong bearish momentum, trading below key technical levels with support at $18,313 and resistance at $20,367.95. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Michalis Efthymiou HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • PM Philip Morris stock, top of range breakout at https://stockconsultant.com/?PM
    • EXC Exelon stock, nice range breakout at https://stockconsultant.com/?EXC
    • UTZ Utz Brands stock, watch for a bottom breakout at https://stockconsultant.com/?UTZ
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.