Is There a Way to Completely Eliminate Losing Trades? Does a 100 Percent Accurate Forex 80 accurate forex system System Exist? Here’s the bad news: there is not 100 percent accurate forex trading system.
You probably knew that, but it’s human nature to try to find a perfect solution even when our commonsense tells us that it doesn’t exist. The good news is that there is a short list of “best practices” when beginning to trade the forex that will help you decrease your losses and increase your profits. The forex is a highly leveraged market, with typical leverage ratios of 50:1 and 100:1. In some circumstances, a 200:1 leverage is available. It also means that if you use the maximum available leverage, you can be wiped out in a matter of seconds when the market moves against you.
Another aspect of the forex market that differs from stock trading is that after filling out a short questionnaire about trading goals, anyone who who can present a debit card and some means of identification is qualified to trade — and on margin ratios unavailable in the stock market –without depositing a cent in their forex account. These forex trading characteristics can attract dreamers hoping for a quick cure for financial ills. In this sense, it has an attraction similar to state lotteries. Abundant research about lottery participantsconcludes that the average lottery ticket holder is poor and that 21 percent of participants believe it’s the surest and best path to wealth. In reality, the odds of winning a state lottery are about one hundred million to one. So far as the forex is concerned, the hazards are particularly abundant for new traders because the reality is that unlike the lottery, because the trading on the forex not a game of chance: it’s a game of skill, too often a skill that new traders don’t bother to acquire before placing their first trades. The best practice when you’re beginning trading is: take it easy.
Set limits on losses beforehand and then stick to them. One practice that’s almost always disastrous is to follow a big losing trade with another one in hopes of recovering what you’ve lost. In fact, the phrase can even become your motto. About two-thirds of forex traders lose money, many losing what they never had to begin with and ending up with whopping high interest credit card debt.
The average forex investor gives up and stops trading in about four months. There are two great ways to prepare for a successful entry into forex trading. One is is simply to read the forex trading literature. There’s a lot of it and it’s all widely available on Amazon and elsewhere. Reading Amazon’s customer ratings will give you a very good idea which books are useful and which are not. The other great way to prepare is to open a practice trading account.