People are leaving stocks and turning towards forex in droves. Forex trading is the new fad. Many new gurus have appeared who are paddling their forex trading courses to the general public. If these gurus had made their fortunes from trading forex they need not sell courses. These gurus are only making money from the sales of their course.
Forex trading is being shown as so easy that anyone with a computer and an internet connection can do it from the comfort of their homes. No doubt, you can now trade forex from anywhere in the world. The internet revolution has made retail forex trading possible.
But nobody will tell you that out of 100 new traders; only 5 survive in the long run. Forex markets are brutal and unforgiving. Only the best will survive. 95 of the new traders will lose their money and quit in a few months or maximum one year.
Why 95% of the new traders fail? Simple, because they assume that by reading one or two eBooks, they will understand forex markets. Forex markets are far more complex and complicated to understand in one or two eBooks. You cannot succeed at forex trading until you start living and breathing it.
If you really want to succeed at forex trading than learn it properly. Understand how the forex markets functions. What is the role of underlying economic factors like interest rate, GDP growth rate, unemployment figures, fiscal deficit etc in moving the currency markets? As long as you wont get the feel of the markets, you wont succeed.
The best method to understand forex markets is learning what fundamental and technical analysis is. Fundamental analysis tells you how economic factors affect currency markets. What is the role of interest rates, GDP growth, unemployment figures, housing slump and host of other factors in moving the forex markets? Fundamental analysis can predict the medium to long term trend in the forex markets.
Technical analysis studies the past behavior of prices to predict the future behavior of prices. You need to master technical analysis if you are thinking of becoming a day trader. Technical analysis is ideally suited to forex markets.
Technical analysis uses a number of indictors to predict the movement of currency pairs. Understand how to properly use these indicators to determine whether the market is trending or ranging and what is the best entry/exit.
Those who have been stock trading can switch to forex trading rather fast. But as long as you dont make forex trading your passion, you will never become a winning trader. If you want to succeed than take forex trading as a passion and learn everything about forex you can.
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