Online FOREX Trading Looks Easy But This Factor Makes Traders Lose

 


Visitors: 151

Online FOREX trading looks easy, but there is one factor that makes it hard to succeed and it is not picking market direction or the long term trend.

So what is the factor that makes online forex trading hard and causes the majority of traders to lose?

Read on

The factor that makes online forex so hard is volatility within the trend.

A common scenario

You spot a trend and enter. The market pulls back and you are stopped out. The market then reverses the way you anticipated and goes onto make $10,000 or more and you’re not in!

This happens to all traders at some point and is caused by volatility.

Of course, markets trend either up or down but there are frequent pullbacks against the trend

Many novice traders get taken out by them lose and the market of course, goes back to the way they had thought.

So how do you prevent yourself getting stopped out in online forex trading and stay with the longer term trends?

Here are some tips:

1. Use a breakout method to trade

Trade only significant, valid breaks of critical support or resistance.

Stop placement is obvious on these trades and the odds are in your favor, if momentum goes with the breakout.

2. Don’t trail your stops to soon

Another common error is for traders to trail stops up to quickly and try to lock in profit, however all they do is manage to get stopped out.

By trying to restrict risk, they actually create it.

If you want to catch trends and profit from them you need to give the market room to breathe.

3. Use options

Options are great tool for giving you staying power.

Use at the money or in the money options with plenty of time value, to ride out short term price swings against you.

4. Don’t day trade

Day trading is a great way to get yourself stopped out and lose.

Quite simply, volatility is random is daily or hourly time frames and your chances of being stopped out are great, as support and resistance and are not valid.

Volatility How to deal with it

The above are some ways to get around getting stopped out to soon.

Any trader trading online forex markets needs to have an in depth understanding of volatility and how to deal with it.

You need to know about standard deviation of price and that will be the subject of part 2 of this article, combined with some indicators you can use to enter when reward is high and risk is low.

MORE FREE TRADING INFO & A SYSTEM WITH A REAL TIME TRACK RECORD

On all aspects of becoming a profitable trader including info and for an exclusive Gann Trading Course visit our website at http://www.net-planet.org/index.html

(531)

Article Source:


 
Rate this Article: 
 
Forex Trading Education - Trading Looks Easy But You Must Have This Key Trait ..
Rated 4 / 5
based on 5 votes
ArticleSlash

Related Articles:

Online Forex Trading – The Main Reasons Traders Lose

by: Kelly Price (February 24, 2007) 
(Finance)

Forex Trading - 6 Character Traits That Cause 95 Percent Of Traders To Lose

by: Kelly Price (December 30, 2007) 
(Finance/Currency Trading)

Forex Day Trading - The Profit Illusion That Sees Traders Lose

by: Kelly Price (June 29, 2007) 
(Finance/Currency Trading)

Forex Trading - 95% of Traders Lose to Enter the Elite 5% - You Must ..

by: Kelly Price (September 08, 2008) 
(Finance/Currency Trading)

Forex Trading Made Easy For Currency Traders

by: Sturat Mitchel (September 21, 2008) 
(Finance/Currency Trading)

Foreign Currency Exchange Trading tips: Why Do 90% of All Forex Traders Lose ..

by: Jay Molina (June 27, 2011) 
(Business/Career Advice)

Forex Trading Demo Makes Easy Forex Possible

by: Terry Till (September 05, 2008) 
(Finance/Currency Trading)

Online Forex Trading - Why Most Traders Cannot Adopt a Mindset To Win

by: Sacha Tarkovsky (April 15, 2007) 
(Finance)

Forex Trading These Traders Had No Experience But in 14 Days Became Super ..

by: Monica Hendrix (June 18, 2008) 
(Finance/Currency Trading)

Forex Trading Education - Trading Looks Easy But You Must Have This Key Trait ..

by: Kelly Price (June 30, 2008) 
(Finance/Currency Trading)