There’s no denying that Forex trading is a form of investment that promises high returns. For decades, millions of people around the world have profited from currency pair movements. These days, it’s now available to retail consumers – not just the traders on Wall Street!
You’re likely reading this article today because things don’t seem to be going according to plan with your Forex investments. You might not realize it, but there are several reasons you don’t have profitable investments in Forex. Take a look at these 15 examples:
1. You haven’t done any market research
When a business wants to launch a new product or service, they first conduct some market research. You need to do something similar with Forex trading strategies! That’s because you could be wasting money by investing in the market the wrong way.
For instance, currency pairs have differing levels of volatility. If you invest in a currency pair with low volatility, you can’t expect much in the form of price movements. So before you invest in an “emerging” or little-known currency pair, do your research first.
2. You’re using the wrong platform
Nowadays, Forex traders use online platforms to buy and sell each day. Gone are the days where you’d need to phone up a broker. As you can appreciate, there are hundreds, if not thousands of Forex trading platforms available for you to use.
If you’re wondering which platform is best for Forex trading, the answer will depend on your requirements. Some people might prefer a platform based and regulated in their home country, whereas others may want to use an offshore platform.
Some traders may prefer using a tried-and-tested software package like MetaTrader 4 instead of a browser-based solution. You need to think about your requirements and use a platform that meets or exceeds them. Check out reviews of various platforms including this etoro review.
3. You rely too much on technical analysis
There are plenty of Forex traders out there that swear by the array of weird and wonderful technical tools they use in their platforms. If you’re one of those people, you need to remember that technical analysis only shows you what happened in the past.
Despite what you might have got told, technical analysis tools cannot predict future price movements. No-one can do that! You can only use them as a guide to help you make an informed decision.
If you’ve got about Bollinger Bands, moving averages, or even Fibonacci lines overlaid on your trading screen, don’t rely on them. They can’t tell you what’s about to happen next on the market.
4. You aren’t taking note of key economic announcements
Have you ever noticed how websites that give you real-time price movement information on currency pairs have news sections? Most will even have calendars that tell you when the world’s leading governments or economic powerhouses are due to release data.
For example, in the United States, the monthly Non-Farm Payroll announcements are worth checking as they get released. That’s because they have a significant impact on currency pairs such as EUR/USD due to the nature of the economic data released by the government.
5. Your broker sucks
When you trade on the Forex market, you have to do so through a middleman known as a broker. A quick Google search will reveal a raft of brokers available for you to use. While some brokers are brilliant, others are a waste of your time and money.
The sad truth about Forex brokers is there are a few bad apples that you need to avoid. These are usually unregulated ones based in countries you’ve never heard of. And they’re the types of brokers that manipulate transactions and price movements in their favor.
When looking for a new Forex broker, be sure to do plenty of due diligence. How long have they been operating? How many clients do they have? Where are they based? And how do they get regulated? Be sure to get feedback from other Forex traders as well.
6. You’re too impatient
Forex trading isn’t the same as options trading, where you choose a price direction, expiry time, and hit a Call or Put button on your browser. Even most day traders and “scalpers” don’t make trades that end after such a short timeframe.
If you’re not a patient person, Forex trading probably isn’t for you. Forex trading suits people that want to enter and exit the market according to their specific requirements. It’s not a way to get rich quick!
For those with little time to devote to Forex trading, there are some helpful ways to invest in currency pairs. One example is by using a trading bot on software such as MetaTrader. Another is to have your platform message you when an entry price meets your requirements.
7. You don’t have an investment strategy
Why is it that you want to invest your money in Forex currency pair price movements? Do you want to be a full-time trader? Are you trading to put money aside for your retirements?
