The Forex market provides a lucrative opportunity for traders to earn profits. Studying and understanding how the Forex market works add to the chance of being successful.
Some traders have given up already, others are thinking about it, and there are people interested in Forex trading but are yet to take the plunge.
This article will explain to you some of the reasons that discourage Forex traders from participating in the market.
Increasing interest in trading the Forex market brought about a rise in retail Forex brokers. This made it easier for traders to invest in the market. However, there are both legitimate and illegitimate Forex brokers.
The internet is awash with stories from people whose money was stolen by unscrupulous Forex brokers. Making it difficult to withdraw money and interfering with traders’ trades are some of the ways illegitimate Forex brokers con their clients.
Forex frauds discourage people from investing in the Forex market due to the fear of losing money to unscrupulous brokers. The uncertainty of whether a Forex broker is legitimate or not may influence people not to trade the market.
Fear of Losing Money
The Forex market is volatile and making losses is common for both beginners and professionals.
According to research, the percentage of unprofitable traders is much more than the percentage of profitable traders. This simply means that most traders lose money in the market.
Traders may stop trading due to making more losses than profits. People interested in Forex trading may fear to lose their money hence prefer to stay out.
Rushing From Demo Trading to Live Trading
Demo trading allows traders to learn and practice trading in the Forex market without the risk of losing money. Demo trading also enables traders to practice their trading strategies.
However, you may find traders rushing to trade in live accounts due to the excitement of making profits (without first being profitable in the Demo account). This isn’t always the case as traders may end up making losses. This kind of experience may discourage people from investing.
Little Education Investment
People interested in the market need to learn and gain an understanding of how the market works.
It’s important to be prepared. A few articles on Forex will help gain some knowledge to start but it should not end there; the more you read the more prepared you will be. You may find people starting to trade after only reading a little bit or nothing at all about trading. This will end up disappointing them in the end since one has to grasp the workings of the market if there is any chance of success.
Taking free and paid courses online, reading books are some of the ways to help traders understand the market.
Forex trading has created opportunities for people to earn a living. However, this is not always the case for most traders who end up giving up. This article aimed to show you some of the reasons that discourage trading and to explain that proper preparation is required before trading the markets.
We hope you’ve enjoyed this article; to keep reading find all of our Forex Education articles here.