To say
forex day trading is not risky would be a lie because it is definitely the
riskiest form of trading in the forex market, but you can make money if you know
what you are doing and have the ability to contain your emotions in this high
paced environment. The risk and tempo are what keep a lot of people out of this
aspect of it and going the long term way.
I once had a student Alvin who attended my forex training course and one day, he
asked me if he should go for forex day trading using the forex scalping methods
I've thought him. I told him forex day trading may be lucrative but may not be
suitable for everyone. I went on to analyze the pros and cons of forex day
trading with him.
Firstly, something that is a draw to forex day trading is the fast trading
cycle. Many traders like the rush and potentially, it could actually be more
fruitful than long term trading. Each individual trade may not make as much as a
long term trade, but because you may be making 10 trades to every one of theirs,
if not more, your profitability can actually be higher than that of the long
term forex trader.
Another drawing characteristic of day trading is that you do not have the
overnight worries of the long term trader. Your money is out of the market at
the end of the day and if anything happens to affect the currency of a certain
country, you just roll over and go back to sleep. The long term investor will be
chewing on their nails waiting for the market to reopen.
Of course, with any positive there are negatives that have to be considered. The
first of these is that the plain fact of the matter is that about 4 out of every
5 people that day trade end up losing money. There are several reasons for this.
One of them we have already mentioned in the risk factor and another is that
traders are pulled in by the lure of making very fast money and don't do the
work that is necessary to be a successful day trader.
Also, a lot of the people that are day trading are doing so on borrowed money.
They are leveraging against their forex account and they end risking too much on
one trade and then they end up in massive debt when a trade goes bad. It is not
the forex market that is causing this, it is the trader that is not putting in
the necessary work and effort to be an effective day trader.
Another thing about forex day trading you should know is that it will take up
quite a fair bit of your time as you need to monitor the forex market very
closely. Some part time forex traders overcome this by using automated forex
trading system that trades for them.
If you're having a full time job, it can also be quite distracting. Having heard
my analysis, Alvin said he's just not that into forex day trading as he has a
full time job and he does not have the time to monitor the forex market. Also,
he said he does not need the extra excitement as his job is already stressful
enough for him.
If you are still interested in day trading and have the time, give it a shot,
but just do it conservatively. There are plenty of very successful day traders,
but they take the time to create a successful forex day trading system that
works and gives them an overall profit day in and day out. If you find that it
is too much for you, just explore the long term aspect of this market niche as
there is plenty of money to be made!
|
To learn
how to trade forex successfully using a simple, time-tested and proven
forex trading system, instantly download my FREE 56-page "Forex Trading
To Riches" ebook at
http://www.forextradingpower.com now.
The author, Daniel Su, is the founder of
http://www.ForexTradingPower.com where you can get free premium
forex trading tips and resources. Daniel Su specializes in teaching real
people how to trade the Forex market for long term financial success.
|
Written By Daniel Su, Expert Author and Founder of
ForexTradingPower.com
© Copyright ForexTradingPower.com.
You are free to republish this forex
article by Daniel Su provided the signature box (shown above) is placed
at the bottom of every article published. The link in the
signature box must be made live (meaning anyone can click on the link).
No changes in the text and contents can be made.
|
 Secrets
To Making Money Trading Forex? Download This FREE
Forex Ebook Worth $67.00 Now...
You'll Also Get
FREE subscription to my “PowerPips” Weekly Forex Newsletter
Filled With Market Analysis, Forex Trading Tips and Strategies…
Just enter your name and email address below
and I'll send your "Forex Trading To Riches" ebook (worth $67)
for FREE and not forgetting your weekly forex newsletter...
Your information will never be
sold or shared with anyone ... NEVER! I respect your privacy and
hate SPAM too!
The download link for the
Special eBook will be sent immediately to the email
address provided above. |