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Not all Forex traders earn easy money in Forex trading. It is only a few that make it big and the reason for this is perseverance, knowledge and a passion for learning more about this trade. Greed and impatience displayed by many Forex traders results in big losses in their tradings. The many drawbacks of Forex traders include:
1. Magic tricks of the trade
Most of the Forex traders are on the lookout for a magical formula with which they can multiply their profits and earn big revenues. There is no magic indicator or a set of indicators that will make anyone rich in a short period of time because the market is changing every single moment. Every Forex trading system will fail from time to time and not last permanently.
2. Insufficient knowledge of the Forex market
Every career path or job requires knowledge and education. If you are not well educated and well versed in your work area, you will not be able to reap the benefits and profits. Just like other professions, Forex traders also require long years of study. The market also teaches us invaluable lessons on every single trade made. This process of education for a Forex trader could take for ever. It is better to have someone experienced guide you through your trading, since false or incomplete information could take you on the wrong path.
3. Quick way to earn easy money
Most traders are attracted to the Forex market for the reason of making quick and ay money. They feel that making money is just click away. But what they fail to understand is that it should be the right click. This is dependent on factors like proper education, patience, discipline, commitment etc. It is possible to make money but not easy enough as it sounds.
4. The thrill factor
Many traders are also attracted to the Forex market because they think it is exciting and thrilling to be a trader. There are many challenges and thrills associated with Forex trading like steep gains and losses. Some traders sooner or later discover that this is the most expensive adventure undertaken by them.
5. Management of investment funds
Most traders tend to forget about this important aspect of trading. They think that money management should be used until consistent profitable results are achieved. Money management allows your profits to increase, but also limits your risk on every single trade. It teaches you how much to risk on each trade. Effective and timely money management will ensure profitable trading in the years to come.
6. Emotions of fear and greed
This is one of the most common drawback of a Forex trader. Every trader has emotions of greed, ego fear and hope associated with his trading. It is imperative that you be aware of all your psychological issues that might affect the trading decisions made by you and be in a position to control them too.