Retail Forex has existed since the 1990s, and the coronavirus pandemic has reinvigorated the industry. These services are available in many parts of the world, and scams are common. Can you find a broker worth trusting, or is it all a sham?
The Legal Aspect
Online trading is regulated in many parts of the world. For example, in the United States, every provider must be registered and licensed in the country. On the other hand, top forex brokers reviews in Indonesia list brands authorized by the FCA, the FSCA, the CySEC, and other foreign entities. Legit businesses let traders make real money and withdraw profits without a hitch.
The Most Profitable Strategy
The financial result depends on a number of factors: the competence of the trader, market conditions, stability of the digital platform, etc. No universal recipe exists. Otherwise, every trader would be a millionaire.
One of the keys to success is choosing a strategy matching your goals, lifestyle, and available resources. Any analytical approach (fundamental, technical, or hybrid) and method (scalping, swing trading, day trading, etc.) can bring profit when applied properly. Trading requires focus and composure. Unfortunately, too many traders ignore the rules.
Risk management is an integral part of a proven approach. It requires limiting possible loss for every position, risking no more than 1% of total capital at once, and diversifying the assets. Traders who neglect market risks are doomed.
Why Most Traders Lose Money
It is no secret that the majority of retail traders end up in the red. This happens for a variety of reasons, but recklessness is the primary cause. Trading requires careful preparation, market analysis, and emotional control.
Forex is inherently risky. The market is moved by fundamental forces in the political and economic domains. Profits are based on well-founded predictions. Here are the most typical mistakes.
- Trading on a hunch.
- Trading without sufficient preparation (skipping the demo trading phase).
- Failure to use Stop Loss and Take Profit.
- Risking too much of one’s capital per trade.
- Choosing an uncomfortable style (e.g., the intensity of scalping may be too stressful).
- Lack of self-control.
- Chasing losses.
- Absence of a trading journal.
Whether you prefer fundamental or technical indicators, you need a combination of knowledge and composure. Emotions are the arch-enemy as they cause irrational moves. Making a loss is frustrating. Negative feelings may trigger new trades, as you hope to compensate for the damage. This only exacerbates the loss.
Forex trading is profitable for those who choose legit brokers and follow proven strategies. Experts do not deviate from their course of action due to frustration or excitement. They make decisions based on rational analysis. How much you earn depends on the volume, but talented day traders can achieve a 10% monthly return.