When you first start forex trading online things seem to be so simple and straight-forward; all you have to do is to buy a currency pair and then sell it once the price increases. However a few weeks down the lane and probably after losing most of your account you have come to realize that forex trading is not easy. There are a number of variables (commission, leverage, spreads and your emotion) which are against you.
Most forex traders seem to be short term, swing or intra-day traders looking to pick up a few pips and move on. What makes this difficult is that trying to accurately predict 20-30 pips over and over again on a consistent basis with a long term profit is something nearly impossible for the majority of forex traders. Most of these very short term traders rely on the technical indicators to set up their trades.
After you realize that forex trading is difficult you feel as if you are fighting against all of these odds. The truth is that even the most successful traders today have started out at some point as fresh traders with the only difference; they dedicated themselves to studying the market and winning the game. It is possible to make a profit when trading in the forex market if you understand everything there is in order to be a successful trader.
You need to have an understanding of the type of person that you are so that information can be accounted for in your approach and strategy. Each trader must realistically assess their strengths and weaknesses so they can understand how it will impact their trading decisions. The person doing the trading is the weakest link in the chain. You have to understand and reinforce this link so it becomes as strong as the rest of the chain.
Very few traders are long term and there are some very good reasons why. Longer term trading requires very good knowledge of fundamentals and economics. It takes time to reach all this and most traders probably find it very boring and difficult to follow. What really makes this type of trading so difficult is that in order to stay in these trades you'll need to be able to ride out all those ups and downs that occur as a trend progresses.
