Forex trading is in equal parts interesting as well as a challenging venture. FX trading aspirants are often lacking in proper knowledge and awareness of the various aspects of trading. Hence it is highly important that you know exactly what you are getting yourself into. Here are five key lessons that you ought to know.
1.It's not easy money:
Contrary to expectations FX trading is not easy money. It's not a 9-5 job with fixed remuneration and you are forever in uncertainty as to how much you will be earning each month. You have got to be highly disciplined, patient all the time and trade as best as you can to take what profits you earn. There may be times when you make huge profits and times when you barely even manage to break even. To show such consistence and discipline at all times is easier said than done. Thus, hoping to get rich overnight by trading forex is a highly unrealistic goal. There are too many factors in the market that a trader cannot control which determine how much he/she ultimately gains or loses. Do not be misled by false claims from brokers and Internet marketeers who tell you otherwise. You can be a successful trader only if you are willing to put in what it takes.
2.It's a lifelong learning process:
Forex Trading is a continuous learning curve. The financial world is a highly dynamic one and you should constantly update your knowledge & skills in order to stay relevant. Unless you test yourself from time-to-time against changing market environments you will fail to remain profitable. Stay abreast of recent trends and developments to constantly up your game.
3.You are your own boss:
If you are a person who needs spoon-feeding or constant guidance then forex trading may not be your cup of tea. As a forex trader you are only answerable to yourself and it is you alone who has to call the shots as per the market conditions. There will be nobody around to tell you what to do, you have got to take your own decisions. It is up to you to give it your all.
4.It takes money to make more money:
As a forex trader you are going to win some trades and lose some. Unless you are mentally and financially prepared to withstand the hard blows, it will take a huge toll on your well-being. Many traders go into major depression after a spate of losses. A true professional shows equanimity in the face of profits as well as losses instead of being a nervous wreck which will do you more harm than good.
5.You don't have to be a prodigy to trade:
A college dropout can be as successful trading forex as an Ivy League pass-out. You need not be exceptionally smart or prodigious to ace the forex market as it hardly involves any textbook knowledge. To be adept in the FX market you need discipline, tenacity and a never-say-die attitude. So instead of being discouraged by the daunting charts and technical indicators try to learn the psychological tricks that the markets involve and develop emotional intelligence to come out tops.
Thus awareness of the above facts can help you to avoid pitfalls and enable you to kickstart your forex trading career on the right note.