Forex Is Like A Casino Playing Too Much Can Be Painful



Forex Is Like A Casino Playing Too Much Can Be Painful

Forex is​ Like a​ Casino — Playing Too Much Can Be Painful!
Between 5 p.m .​
EST Sunday and 4 p.m .​
EST Friday,​ there are millions of​ Forex traders around the​ world trying to​ make a​ profit by predicting the​ future movement of​ currency exchange rates .​
With nearly 1.8 trillion dollars changing hands each and every day,​ the​ Forex is​ the​ largest and most fluid market in​ the​ world .​
Traded 24-hours a​ day and with investors having instant access to​ price changes via an​ Internet station,​ it​ is​ literally possible to​ watch one’s fortunes ebb and flow—one pip at​ a​ time!
A pip is​ equal to​ the​ smallest price increment that any currency can make .​
For the​ U.S .​
dollar and most major currencies,​ that amounts to​ 0.0001 (0.01 for the​ Japanese Yen) .​
While it​ seems near impossible to​ make any money when dealing with such small numbers,​ the​ standard transaction unit on​ the​ Forex is​ $100,​000 and is​ called a​ lot .​
Thus,​ the​ movement of​ just a​ few pips in​ either direction can turn into big profits or​ big losses—real fast!
In truth,​ playing the​ Forex is​ much safer than heading into a​ casino because the​ odds are not automatically stacked against you—but you can still lose your shirt if​ you over trade .​
Just like professional gamblers will tell you that playing against the​ casinos is​ a​ losing proposition—professional and successful Forex traders know that trading too often is​ simply stacking the​ odds against them.
For whatever reason,​ most of​ us are simply not going to​ risk $100,​000 of​ our own money on​ something as​ volatile as​ the​ Forex .​
This is​ why the​ margin is​ such an​ important factor when thinking about buying and selling positions .​
Typically,​ an​ investor would need to​ put up $1,​000 of​ their own money to​ buy a​ lot,​ or​ 1/100 of​ the​ total .​
Leveraging a​ position may be a​ practical necessity but it​ also means that the​ average investor is​ more at​ risk when it​ comes to​ price fluctuations .​
The more leveraged the​ position,​ the​ greater it​ will be affected by pip movements—up or​ down.
Making a​ profit in​ the​ Forex market boils down to​ knowing when to​ enter and exit a​ position—period .​
Investors place stops on​ orders to​ help limit losses and they need to​ rely on​ those stops to​ prevent them from losing too much—or bailing too soon! Investors who track the​ market every minute of​ the​ day and constantly monitor their positions are not only more likely to​ go crazy—they are also more likely to​ bail when the​ price starts to​ dip .​
So long as​ you have stops in​ place and are sticking with your investing strategy—be patient! At most,​ check the​ market at​ the​ close of​ each day and just hold to​ your strategy until the​ charts indicate otherwise.
It is​ difficult—almost impossible—not to​ worry about your investments so the​ natural impulse is​ to​ monitor them closely .​
However,​ the​ time to​ do your homework and put in​ the​ time is​ before acquiring a​ position—not after .​
Backtesting will help you find the​ best currency pairs for your investment tastes .​
Once you have the​ stops in​ place,​ check the​ charts and market once a​ day and let the​ investment ride .​
Losses are part of​ the​ game and your stops should protect you from losing more than you are comfortable with .​
Forex can make you a​ lot of​ money with moderate risk but it​ will become like a​ casino and the​ odds will turn against you if​ you play too often!

Forex Is Like A Casino Playing Too Much Can Be Painful





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