Jonathan Lee
Member
Many people think that Forex trading is easy. They start trading in the forex market with the misguided perception that the notion of profit goes by purchasing cheap and selling at a higher price. Nevertheless, the presence of hidden risks is a danger often unperceived.
The market is open around the clock, which in and of itself, might lead to sleepless nights, excessive tension, and ultimately, further poor decision-making. By the mere fact that the limits are not defined, a trader can easily trade too much and lose more than it was to lose in the first place.
The sudden price changes brought about by the world’s news or the central bank's activities are one of the major unaccounted risks. There is even room for a minor change in interest rates or an unpredictable piece of news to be enough to make the market change like a roller coaster. This is the point where an account can be completely destroyed, if very high leverage has been used there.
Emotional trading is one of the big risks as well. When one’s money is at stake, the person himself becomes irrationally impulsive, as feelings of fear and greed enter the scene. Some traders become so motivated to recover their money that they pursue their losses, so this situation only accelerates the rate of increase in losses caused by reckless decisions.
The market is open around the clock, which in and of itself, might lead to sleepless nights, excessive tension, and ultimately, further poor decision-making. By the mere fact that the limits are not defined, a trader can easily trade too much and lose more than it was to lose in the first place.
The sudden price changes brought about by the world’s news or the central bank's activities are one of the major unaccounted risks. There is even room for a minor change in interest rates or an unpredictable piece of news to be enough to make the market change like a roller coaster. This is the point where an account can be completely destroyed, if very high leverage has been used there.
Emotional trading is one of the big risks as well. When one’s money is at stake, the person himself becomes irrationally impulsive, as feelings of fear and greed enter the scene. Some traders become so motivated to recover their money that they pursue their losses, so this situation only accelerates the rate of increase in losses caused by reckless decisions.
