Everyone is familiarized with the fact, only 2-3% of the traders can make a profit in the Forex market. And this 2-3 % of the retail traders are the elite traders who know the definition of investment. Investment doesn’t mean you will get high returns within a short period. Professional investors always think about the pros and cons. They never risk too much in any trade even though they have enough capital. They always go with the flow of the business and manages to make a decent profit. In Forex, you must learn to go with the flow, or else you are going to have an extreme financial crisis. Those who are trying to beat the market is making a big mistake. If you ask any professional trader, “Can you beat the market” they will smile and say NO. After reading this article, you will never try to beat this market.
The trend is your friend
The Forex market moves up or down. The traders have to open short or long orders. There is a 50/50 chance of making a profit from a certain trade. Even after doing all the advanced analysis, you can’t say for sure, a certain signal will generate profit. But if you analyze the historical price movement of any asset, you will notice trending movement. The trend in any asset lasts for 3-6 months and even it might be more than years. So, if you stick to the major trend, you don’t have to worry about losing trades. On the contrary, if you try to beat the market by betting against the trend, you might have to lose for 3-6 months or even more. And an individual can’t withstand such an extended period of loss.
Do the professionals break the rules?
Beating the market means, you will be making a profit by breaking the rules. To understand the CFD market, you have to understand the risk exposure first. Let’s say, you are willing to risk $100 in a certain trade. Unless the reward is $ 200 or the risk-reward ratio is 1:2, you should not place any trade. Sadly the new traders are placing orders with 1:1 or negative risk-reward ratio. So, when things go wrong it becomes really hard to recover the loss. This example is given so that you understand the importance of basic rules. So, breaking these basic rules is more like going against the market. You can break these kinds’ rules at any moment but can you manage to make a profit by things harder. The professional traders never make things harder and they always stick to their rules.
Developing your trading skills
Those who are trying to beat the market, don’t have enough skill to understand the beauty of this market. Open a demo account with Saxo and try to understand the market behavior. Once you get into the details, you will never go against the market. A simple trend trading strategy can significantly improve your trading performance and allow you to make a profit even at complex market conditions. To develop your trading skills, you have to read books and articles regularly. Keeping yourself confided to your old strategy is not going to work. Get out of your comfort zone and start pushing things to the limit so that you can understand how to place the trade like a pro.
Those who are looking to develop their career in the trading industry should not think about breaking the rules. They should create a fixed set of rules and follow them blindly. However, if you keep on losing trades even after doing all the research, something is wrong with your trading strategy. Analyze your trading result and try to find the weakness. Focus on the trade signals and bring variations to your strategy to improve your performance.