why you should not trade forex

funds that invest in international indices through CoreShares. In this case, you need to pick a direction and stick with. Stick to your risk management strategy, and avoid going "all in no matter what the reason. In this example, your rand exposure increases from R100 000 to R103 700m so your profit is R3 700. It is common for forex marketers to encourage you to trade large lot sizes and trade using high leverage to generate large returns on a small amount of initial capital. Some traders are out there looking for the ever-elusive 100-percent accurate forex trading system. Global Trader is owned by the JSE-listed Purple Capital Group and IG is a UK-listed company with offices in about 15 countries, including South Africa. Refusing to Be Wrong, some trades just don't work out. For example, if you used 100 times gearing so that your R10 000 bought you exposure of R1 million, and the rand strengthened to R13, you would lose R37 000 three times the amount of your investment. Trying to Pick Tops or Bottoms. If you are not willing to do that, you will have an accident.

Why you should not trade forex
why you should not trade forex

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"Failing to plan is planning to fail" is an adage that holds true for any type of trading. At any given time, successful traders know exactly how much of their investment capital is at risk and are satisfied that it is appropriate in relation to the projected benefits. For example, at a 100:1 leverage (a rather common leverage ratio it only takes a -1 change in price to result in a 100 loss. If the rand strengthened to R13, your loss on R10 000 is R3 700 more than a third of the value of your initial outlay. There are many companies that claim to be able to guarantee returns from forex trading. If the rand falls to R14 to the dollar, your 740.74 will buy you R10 370. It's fine to shoot for a reasonable profit but there are plenty of pips to go around. Some traders feel that they need to squeeze every last pip out of a move in the market. Margin is simply a good faith deposit that you make to insulate the broker from potential losses on a trade. As a trader, you just have to accept that you're wrong sometimes and move on, instead of clinging to the idea of being right and ending up with a zero-balance trading account. In fact, it is estimated that 96 percent of forex traders lose money and end up quitting.

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