Trading forex: What Leontios Cassian wishes he knew at the start
Here at Forex Broker Insights, we understand that the world of trading forex can be mysterious, intriguing, but above all confusing to navigate when one is just a beginner. Here we have a list of things Leontios Cassian felt he wish he knew before starting trading:
1. There is never a right time to trade Forex
The best time to trade is…there is never a best time. If there was a set time, everyone would trade at only that time. Ultimately, the right time to trade depends on you as a trader and the type of trading you are doing (News Trader around news releases, or Breakout Trader around the London / New York overlap).
2. There is a worst time to trade!
Try to avoid trading during the witching hour, which is the New York / Tokyo overlap. Liquidity is very low during those two hours and trading volumes can sink to a mere 2% of turnover. Sunday afternoons can hold surprises should an event have occurred over the weekend which means potential negative effects. Wednesday rollover also means unexpected charges can be added to your account during a weekday night.
3. 77% of traders lose their money
A common statistic says that 96% to 99% of traders lose money. In reality, a Forex Illustrated chart reveals that the average number of accounts at a loss is 77% when taking into account the money lost by traders through different brokers. To reduce this risk it’s important to develop a trading plan.
4. If the price of oil increases, CAD / JPY does too
Decreases in energy costs affect the Canadian Dollar as they are one of the biggest producers of oil, whereas Japan imports virtually all the oil it uses. Therefore, Japanese households have an increased budget and businesses are able to flourish, and the value of income in a Canadian household drops. Correlations like this can be valuable things to take into consideration when trading to try to get the most profit.
5. Even if you win most of your trades, you can still lose money
If you got into trading to make money fast, then trading isn’t for you, and neither is it if you cannot control your emotions. Because there isn’t a get-rich-quick formula in trading, it is important to keep a handle over your reactions and manage your risk! It is potentially the most important factor of success in Forex trading and try to limit yourself as far as possible to decrease risk and increase steady practice and profit.
6. Volatility has the potential to kill your trade
The time period leading up to big news events results in lost investments due to sudden drops hitting the stop-loss level. It is in your best interests to leave your stops wide over news event timeframes, but widening stops can also increase your risk when trading on a lower timeframe.
7. Don’t quit your day job
It’s never a good idea to leave your job to pursue trading full time, as the chances of being able to support yourself the way a stable job would offer, are slim. Make sure you have more sources of income than just Forex trading. Imagine you had no other way to make money except trading. You would be so stressed trying to win each trade just to pay your utilities! Rather keep your job and pursue trading on the side until you are confident enough to make the right decisions about your income.