I have direct knowledge of some rather unsettling facts regarding the failure percentages of FX traders. The industry is buzzing with a certain number. 95 percent of it! Are you serious? Nearly 95% of forex traders lose money, give or take a few percent. What a startling number!
There are numerous causes for why so many forex traders lose money. Part of it is attributable to the myth that forex trading is simple and that the currency exchange market is like an ATM that is always ready to accept withdrawals. If you’ve ever traded foreign exchange, you know this is wholly incorrect!
These myths are a result of the extensive marketing that promotes trading systems, buy and sell signals, and forex “education” that is done both online and in print. System designers, sites, and even many how much is $18 in rands participate in this marketing. The currency market is undoubtedly experiencing a land grab, which began roughly five years ago and has since intensified. According to the recent entry of certain major Wall Street banks, retail forex trading will continue to develop rapidly in the upcoming years.
Many retail forex brokers treat their clients with a “churn ’em and burn ’em” mentality. These brokers seek to swiftly and efficiently assemble as many new accounts as they can. Many of these forex brokers have a very short-term mindset, concentrating on making quick commissions and profits for themselves. This mindset is partly to blame for the high failure rate of individual forex traders.
The failure of so many individual forex traders is caused by something even more nefarious. Numerous forex brokers use this type of operational strategy. Some forex brokers genuinely compete with their clients’ trades. Are you serious? Many forex traders lament the inexplicable hitting of stops followed by the market returning to its previous level of activity. Many forex brokers in today’s market use running stops on their own customers.
Because the spot forex market is, at best, quite weakly regulated and, at worst, not at all regulated, certain bucket shop brokers have been able to get away with this conduct. Spot FX trading is generally unregulated, while regulations vary from nation to nation. As a result, there is a lot of fraud and misleading advertising and sales techniques that many forex brokers employ on their unwary clients.
Sincere Forex Companies
The good news is that more trustworthy and sincere forex companies, including brokers, are becoming more well-known. Additionally, additional regulation is soon to be implemented, which should aid in halting some of the unscrupulous practices used by forex brokers.
However, it is crucial that you, the individual forex trader, thoroughly investigate your broker before dealing with actual money. There are a lot of excellent forex brokers available, particularly those that provide an ECN-like service that essentially matches orders and offers liquidity via the interbank market.
Avoiding the excessive, hyper trading that so many system vendors and online forex “education” providers encourage is another precaution you may take to protect yourself. Day trading on the currency market is a very costly and, most of the time, fruitless attempt at making money. Additionally, it raises the possibility that a broker at a bucket shop will trade against you. There is no centralized exchange for the Forex market. This indicates that pricing for the same currency pair may vary slightly amongst brokers. As a result, many people assert that all Forex brokers are crooks that only want to steal your money. While there are certain brokers out there who may do this, the most majority of them do not engage in any criminal activity in order to obtain your money. The majority of how much is $18 in rands are trustworthy companies, and working with them may be quite profitable!
People typically cite two methods that forex brokers use to defraud clients of their money. These are slipping and cease hunting. When a broker notices that there are numerous stop loss orders on their books, stop hunting occurs. According to some, the brokers allegedly set the price there on purpose in order for their clients to be stopped out at a loss. Slippage occurs when you don’t get the price you wanted for your entry or exit order due to a faulty fill.
Nearly every Forex broker has reviews online that claim they use one or both of these strategies, if you look online. Why is that so? Are all of these brokers actually defrauding their consumers of money? Of course not, never. These reviews are typically written by inexperienced or unsuccessful traders who find it difficult to accept their mistakes.
The majority of people aren’t emotionally prepared to confess that they lost money because of their own fault, which makes forex trading a challenging game. It is considerably simpler to hold the brokers accountable for intentionally failing to fulfill customers’ requests or hunting stops. These traders would be aware that this is categorically not the case with the respectable Forex brokers if they were prepared to put a little more effort into their system and learn about market dynamics.
Making use of the forex market’s best advantage, large, enduring trends, is a better, wiser strategy. Every year, the forex market experiences significant fluctuations. With the appropriate information, these trends are quite simple to spot and trade. If you know what you’re doing, you may make a lot of money in the long run riding these patterns in currency pairs. You may reduce your chances of being taken advantage of by a bucket shop forex broker by employing common sense when seeing these trends, trading with the appropriate position size, and maintaining diversification. Most significantly, you can fully take advantage of the fantastic advantages of the currency market.