Forex Trading - Why Its Harder Today Than Ever Before

By: Monica Hendrix

There will lots of people who will tell you the markets are the same today as they were 20 or 50 years ago and their wrong. Despite the advances we have made in computer trading and getting better information quicker, the forex markets are harder to trade than ever before - here's why.

The advance of technology has levelled the playing field where we all get the same news at the click of a mouse in any corner of the globe and this causes volatility and lots of it.

Picking trend direction is easy getting in and staying with the trend is a lot harder, as stops get hit as markets swing wildly.

Volatility has increased and a common problem is for traders all to get in at the same time the buying power quickly evaporates it retraces stops the highly leveraged traders out and then goes back the way he though but he's not in.

Has this happened to you? It's happened to me and countless other traders so how do you cope with it?

The first thing to do is cut trading frequency and focus only on the big breakouts considered valid by the market and place your stops further back and this means de leveraging. Sure you can get 400:1 leverage but that is way too high for most traders.

Cut back position size and give the market room to breathe.

While many people think online trading has made trading easier it's actually made it harder. Furthermore there is a belief that complexity and cleverness will help you beat the market but that's not true either - the more complex you make your system the more the chances are it will break.

Simple forex trading systems work best and always have so keep it simple.

There is a tendency to think advances in our society help us win in forex trading to but the fact you have the same information as everyone else doesn't help you, it hinders you, unless you can work out a trading edge over the vast majority of losers.

The key is to learn to deal with volatility and do what other traders don't to cope with it - we have touched upon it in this article and will put into practice in the next article in this series.

Foreign Exchange
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 

» More on Foreign Exchange