Forex trading, which is now popular with many people, turned out to be high risk from the start. This happens because in forex trading, we are dealing with a market that cannot be predicted with certainty.
So it’s not surprising that many traders experience loss trading because they predict price movements incorrectly. Best forex trade signals will help you find the best strategy for forex trading.
The fact is that trading profit is actually very possible to achieve. But to maintain such a profit, not all traders can do it.
Causes Of Forex Trading Business Failure
There are several things that cause our forex trading to experience losses. Not the profit we get but the loss.
Please note that forex trading has a fairly high risk. We cannot predict the price of currency in the world market.
Even the USD sometimes weakens and strengthens only for a short time. This is one of the causes of the destruction of the forex trading business.
But there are several other things that cause forex trading failure. Here are some of the causes of failed forex trading:
- False Breakout and Incorrect timing
One of the strategies used by many traders in general is breakout trading. This strategy is said to be quite easy to do.
However, in its use, traders must also be aware of several things that pose a threat in forex trading. One of them is a false breakout.
This can be a threat because when a breakout occurs at the most important level, traders will speculate that new opportunities will form.
However, due to a false breakout, the price can actually reverse so that the opened trading position is in the opposite direction of the price trend.
When using a breakout strategy, it is very important to validate the breakout signal. So that you don’t get stuck with a false breakout signal.
One of the determining factors for a trader’s success is knowing when the right moment is to profit from trading. Open position is correct, but not done at the right time then the results are not optimal.
This is the thing that most often causes traders to fail in forex trading. Basically in forex trading there are certain times that are dangerous to trade.
Because at those times it is much more difficult to make a profit because the market is volatile. Too big a risk will be a failure.
The way to avoid this is, you have to know the best times to trade by taking advantage of the economic calendar.
The factor that causes most forex trading failures is overtrading. Too many open positions make the risk higher.
If you overtrade, the strategy that was created from the start will be destroyed instantly. This causes the trading system to be chaotic and the profits obtained are not maximized.
Overtrading can also damage trading psychology. This usually happens to newbie traders.
Best forex trade signals can help you determine when is the best time to stop loss. Newbie traders assume that the more positions open, the greater the profit opportunity. In fact the risk of loss is higher.
- Currency Volatility
Trading on pairs with high volatility can result in 2 things. Sometimes it can be profitable and sometimes it can be a threat to profit.
With high volatility can increase the opportunity to make profit. Conversely, when volatility is high, it can also be a threat to forex trading profits.
This happens because when the currency is volatile, its movements are very volatile due to the sentiment of market participants.
But on the other hand, trading on currency pairs with low volatility is also not good. Because when currency volatility is low, its movements become less certain and difficult to analyze.
For a newbie trader should learn to monitor forex volatility. This is to set a strategy so that forex trading does not fail.
The main aspect of failure in forex trading is psychological. Because they are still newbies, so everything is done based on desire and does not see opportunities.
To find the best forex trade signals, you can develop a strategy so that you can trade forex and get maximum profit.