Statistics show that almost 99.6% of all forex traders fail to go through four straight profitable quarters at a stretch. Again, a recent study by a top market analyst has shown that among 43 million traders in the year 2014-2015, almost 50% have closed their trade with a profitable margin. However lucrative may the market be, similar to any other financial market, hard work on forex trading is primary and requires proper intuition and market analysis before investment.
Making a profit is not all about simple buying and selling the right currency at the right time. Although the ‘forex trading work at home’ concept may make trading in this market seem easy, it is not that picture perfect. Consider an example to understand what depths you have to go for proper investment.
Hard work on forex trading - Proper market analysis necessary.
Say, for instance; you decide to buy Euros as this currency is expected to be bullish in the recent future. But simple expectation is not enough. You have to find out where the European Union Debt crisis stands at present. Are similar situations like Greece likely to arise soon? Brexit is already into effect and showing its signs on GBP. How will it affect Euro in future?
Along with these, you have to keep a check on Germany’s export rates. This is the most stable economy in EU and any change in its growth rate will have an effect on EU. Will Germany consider leaving EU? Experts are already suggesting that Euro for Germany is undervalued and grievances are building. Every factor should be considered, and this is just for one currency. Definitely, forex is hard work.
How to obtain information?
Generally, the question arises, how to obtain so much information on a particular currency and interpret the market accordingly. For forex, even the simple evening news can be a useful source, but others are available as well.
- You must have heard about “forex training works trading.” Proper training helps you retrieve useful information and decode it efficiently. You will understand if Brexit will affect Euro now or two years later when it actually takes effect.
- Work at forex market, if possible. Associate yourself with a brokerage firm and work as a broker before becoming a trader yourself. According to veterans, this is the perfect way to learn about the market and invest properly.
- Be active on social pages dedicated to foreign exchange trading. Even it is not possible for you to track five separate global events simultaneously for you, on these forex forums, five other people will do the research for you and post about the event. With this, you can track five or more events about multiple currencies on the same website.
As it is rightfully said, “You need to water a plant daily. Not all can grow on its own.” A similar concept applies to trading as well. Hard work on forex trading is necessary, and random selection of any currency pair does not work. Remember, chances of making a loss are as high as reaping a profit. So, do your research and invest wisely.