At some point of their learning curve, newbie traders eventually face some of the problems that are intrinsic to the Forex trading industry. So, what are these problems and how to deal with them or even avoid them?
Old strategies stop working. You need to be ready to update, tweak and tune your currency trading strategy if you want to keep it profitable. Market conditions evolve and the old strategies become less effective. Of course, some of the simple strategies are made for all kinds of market states but even they have a lot of parameters to optimize for the specific conditions.
Real account experience different from demo. Although demo account trading is almost the same as the real account trading there are caveats. First, demo trading involves almost no emotions as you do not risk live money. Second, demo trading execution is usually very smooth on all Forex brokers while the real one can be quite bad, especially during the times of elevated market volatility (during the news releases or the overnight interest rate application).
Scam brokers. Unfortunately, not all Forex brokers are honest, there are fraudulent ones among them. Scam brokers mean all sorts of problems to their clients: from aggressive slippage and artificial market spikes to blatant stealing of the deposit or profit funds. Avoid unknown Forex companies and stick with the reputable ones.
Too little knowledge. Jumping into trading with too little theoretical and practical knowledge is a good way to lose money. Experience comes from trading and learning. Practice on demo a lot, learn new things about Forex; if something does not work as you expect it to, try to find out why it does not.
Overtrading. Be moderate in trading. Do not open your next position just because you have just closed one in profit. And do not open a new position to cover the losses of the previous positions. Simply put: do not trade when your mind or emotions tell you to trade, but do trade when the market tells you so.
Paid Forex strategies and robots. They cost a lot, they do not work as the advertisements promise you, and they will not make you rich. Even more so, there are a lot of free strategies, robots, and expert advisors available in the Internet.
Search for the Forex Holy Grail. It is just a waste of time and efforts. The ideal trading system, which would work perfectly under any circumstances and in any market conditions, does not exist. You are the Holy Grail — spend your time and attention to master the personal qualities that can help you achieve better results in trading rather than deplete yourself in vain.
Be careful, prudent, and serious in your approach to the foreign exchange market and you will reap your reward.
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