Is Forex trading easy?
Anyone can invest; thanks to the increasingly user-friendly software and the lower entry threshold, anyone can open and close positions. Successful trading, however, is a different story…. Under the influence of leverage and driven by high profit expectations, we sometimes lose sight of the risk involved. By studying the basics of trading and Forex, however, you can develop a skill that will increase your chances of winning!
Did you know that it is possible to get started with CFD Forex trading today? Forex is currency trading: by buying at the right time, you can obtain a positive return! The beauty of this trading method is that you can try it out at eToro with a $100,000 demo, completely risk-free. Use the button below to open a demo account at eToro immediately:
Successful investing as a beginner
Before we start the flow of information that should make you a good investor, let’s take a look at one of the most famous legends in the Forex world: Richard Dennis. My great example proved the ultimate simplicity of Forex trading through a symbolic bet worth a dollar.
Richard claimed that he could teach a completely random group of people enough to be successful investors within two weeks. The group he assembled through an advertisement in the New York Times included younger and older people, men and women, natives and foreigners. This group of people with no obvious similarities had only one obvious similarity: they all knew very little about investing.
After the short Forex course, he let the group do their thing. The results were very impressive: within four years they managed to earn more than a hundred million dollars! Thanks to Richard Dennis’ training, this group of normal, everyday people had suddenly turned into a group of rich professional investors!
Is Forex trading easy?
More and more people are looking for a get-rich-quick scheme. As the above story shows, in theory it is certainly possible to make money with Forex. However, this does not make Forex easy. You have to actively work against your human instinct to get good results.
Would you like to learn how trading in Forex works? In our article about Forex trading you will discover in detail how the Forex market works. Without training, you will in any case not achieve good results in the long term. Use the button below to read our article about Forex trading immediately:
Is it difficult to learn to trade Forex?
It is not that difficult to learn how to trade Forex. Ultimately, the purpose of Forex trading is to predict the future exchange rate. By applying technical analysis, you can, for instance, recognize important levels on which the price often reacts. Managing your risks is also critical.
What many traders come up against is that it is difficult to follow their plan. This is because many of the principles that are important to become successful with Forex go against our nature. Therefore, let’s discuss in more detail how difficult or easy it can be to invest in Forex.
You don’t have to be a genius
Some people may be put off by films where whizz kids study the markets and solve complex mathematical formulas within seconds. Some affinity with numbers can certainly help you, but you don’t have to be super smart to get started with Forex. In fact, mathematics does not play a significant role and even if you have done a university study, you can still invest in Forex.
In my opinion, it is more important that you are disciplined and patient. If you find it very difficult to follow fixed steps or to control your emotions, Forex trading might not be suitable for you.
Fight your natural urge
If you want to achieve good results with Forex, you will ultimately have to fight your natural urge. Evolutionarily speaking, we have not evolved to make money with Forex from behind our computers. Our brains are still set on hunting animals and when we lose our loot, it hurts.
Our brain deals with money similarly: when you lose a part of your money due to a bad Forex trade, you will have to deal with strong negative emotions. You’ll have to make an enormous effort to suppress impulsive reactions. The first tendency then is to immediately open new positions (to go hunting) to gather new resources.
The prefrontal cortex is the part of the brain responsible for limiting your risks. If you want to become good at Forex trading, you must therefore learn to control this part of your brain.
No focus on percentages
It is also important to remember that with Forex, the rate of return is much less relevant. A beginner can with pure luck achieve a return of 100%. When you deposit $300, and you gamble a bit, this can easily grow to $600. A week later this also just as easily drops to $0.
Moreover, many Forex traders life off their investments. They also withdraw money in between, as a result of which the amount in their account does not give a good overview of their total results. If you want to be successful, you should focus on achieving consistently good results and for that, you will have to practice a lot.
It takes time
As with any skill, getting good at Forex trading takes time. The basics of Forex are not difficult, but keeping at it can be. Many people believe that there is a magic pill that will make them instantly become genius Forex traders: unfortunately, this is not the case. Because of this you see that many beginners lose their deposit rapidly and within a few weeks they are out of business.
Nevertheless, if you take the time, it is certainly possible to make money with Forex. Forex trading does have to fit your personality: it is not a standard 9 to 5 job, and you will have to change your way of thinking.
It can be boring
Another thing that makes Forex anything but easy is that it can be dull. When you are going to trade Forex as an amateur, it is very exciting: in one day you can immediately win or lose dozens of percentages. If you trade according to a system, everything will go a lot slower.
Much of the time you are waiting for the market conditions to be favourable. You then open a position according to your plan and risk only a small percentage of your account on each trade. The biggest part of the time you do nothing.
Professional Forex trading is therefore more a lifestyle than a job. The work can be quite lonely because you don’t have any colleagues, so you also have to make many adjustments in daily life to keep it up.
The pressure to perform
Pressure to perform can also make Forex trading anything but easy. Some people have a successful streak and then quit their jobs. In their dreams they see themselves sitting on the beach, trading for success. In practice this can turn out differently.
When you are completely dependent on Forex for your income, you feel a strong pressure to perform. Many traders therefore start to trade more actively and open more positions. However, this is unwise: a good trader realizes that the best results are achieved by only trading when conditions are right.
This means that sometimes you do nothing for days, weeks or even months. To become good at Forex; therefore, you need the patience of a monk.
No complicated tools
What makes Forex a little easier is that there are no heavy entry requirements. You don’t need 12 monitors to be successful. There are enough examples of Forex traders achieving good results with just their laptop. It is often more important to apply a good mindset and to control your emotions well. When you manage this well, you’ll strongly increase the chance of success.
It is also advisable to first try Forex trading without risk using a demo. That way you will discover whether you have a feeling for it. For some people trading Forex is a liberation, but for others it is more like a prison. Use the button below to directly compare different Forex demos:
What can we learn from this?
Firstly, it is clear that theoretically anyone can be successful in investing. What you need in any case is perseverance and patience. When you combine these two qualities with the necessary knowledge, you can achieve good results. Therefore, investing is not so much about mathematical models or news reports: no, in the end it is all about your mindset and the way you deal with profits and losses.