Yes. It’s true. Unless you can analyze the market, you are going to get into serious trouble.
The whole point about trading the forex market is to make money – not to lose it.
However, would you believe that the majority of traders lose money, despite the fact that they make more winning trades than they do losing ones? This is fact.
Yes, it sounds a bit of a paradox, and it is.
So, how does that happen?
The answer is actually so simple that you’ll never believe that you haven’t thought of it yourself. The fact is that the majority of traders make a profit on around 60% of their trades, but lose money on the other 40%.
It still sounds crazy.
However, here’s the crunch. They LOSE more money on their losing trades than they make on their winning trades.
We won’t go into the psychological reasons behind this here, but that’s what happens.
The point is that you need good market analysis if you are going to avoid these pitfalls. In fact, without good market analysis, you could sink without trace. You also need to have the determination to stick with what the market analysis says, rather than go off in your own sweet way. That will get you into trouble. If the market analysis says go long, then go long. If it says short, go short.
Here’s the difficult one: if it says don’t play, then DON’T PLAY!!!!
This is where the majority of traders go wrong. They feel that they absolutely MUST make a trade – even if market analysis says don’t.
You have to be in it to win it. That’s very true.
However, if you’re in it and it goes pear-shaped, you won’t win it, you’ll LOSE it! We’ve said this often: it’s not rocket science.
Furthermore, to compound the problem, many traders will stick with a losing run in the “hope” that it will turn around. (There is a deep psychological reason behind this, but we won’t go into it here). Just set a stop, and STICK TO IT!
Proper market analysis will help you determine the best course of action. Don’t try and over-ride it.
So where can you find out about market analysis?
FXHQ.com has a lot of helpful advice. They’ve just come up with their list of the best 100 forex brokers in the summer of 2015. This is a trusted site that gives a lot of sound advice.
In addition, they have some information about market analysis which you can find here: http://www.fxhq.com/forex-academy/second-course/which-is-the-best-form-of-market-analysis.html
It is well worthwhile taking a look at it and – more importantly – following the advice. It’s impartial.
What’s most important is that it could save you a lot of headaches and guide you where you want to go – into profit!