Forex Day Trading - Why you Will Lose your Money

By: Sacha Tarkovsky

FOREX Day trading sounds good in theory, but in practice few succeed as the odds are simply against you.

Let's look at day trading and see why it is not a good way to trade and some better ways to make profits from FOREX markets

The time span is to short

It is almost impossible to predict which way the market is going to go in one day. Currency markets reflect economic fundamentals and they are longer term.

To try and predict what might happen in a short time is impossible

To Win You Need to do the following and you can't in FOREX day trading

One of the fundamental rules of trading FOREX markets is run your profits and cut your losses - You simply can't do this in day trading and your profits are too small to cover your inevitable losses.

And it's even worse

Transaction costs are more and are reflected in FOREX day trading in a loss that is deducted from your profits and added to your losses and when you trade frequently these add up.

Why do people day trade FOREX

It sounds good in theory and traders think that they are restricting risk but they are actually creating it and making sure that their profits can never cover their inevitable losses.

Brokers love day trading as they make a lot of commission. Course writers love it because it's a good story, ( and very often they get some pips as a referral commission ) if you buy a course doing day trading ask for a real time track record and see if you get one.

Better ways to trade

You can trade short term and swing trading over a few days can be successful, but perhaps the best way to trade is a long term system (keep in mind many currency trends last for months) this way you will

1. Catch the big trends that make the big profits.

2. Have the opportunity to win on only a small percentage of trades and still make long term profits.

3. Get the odds in your favor.

4. Restrict the impact of transaction costs.

If you want to day trade FOREX You can but the odds are stacked against you maybe you will be one of the lucky ones to make money but don't bank on it.

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