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Why are there thousands of online traders and investors that trade daily in the forex market and how are they making money from it? This is just like a relationship; both sides need to be known.  To succeed or fail in a forex trade will depend on being right about the currencies and their impacts on one another.

 Power of Knowing

Understanding the basics of the market is important in order to make the most out of your invested fund, especially when you are a beginner.  What influences forex market the most is global news and events.   If for example, an ECB statement is released on interest rates in Europe, it will cause a flood of activities.  Beginners tend to have a violent reaction to news like this, closing their positions and then losing out on some of the best trading prospects by being still till the market calms.  Instability is the potential in the forex market and not tranquillity.

 Passive Trading

Many beginning traders make very little profits because they place very tight orders. This method cannot be sustainable in the long run because you have to deal with the difference in the bid and asking the price before making any gain.  This is difficult with smaller trades compared to larger ones.

Trading Too Cautiously

You need to give your position a reasonable chance of succeeding.  Always making small incremental gains and placing tight stop losses can be a disaster.  It can result in undercutting yourself and losing a small part of your money for every trade.


Those that are new to forex can do the trading themselves or have their broker to do it for them.  However, they risk losing growths exponentially if they interfere with what the broker is trading on their behalf or seek advice from too many sources.  Basically, the strategy the broker uses might need a long maturation period.  Seeking too much advice will result in several losses.   Take a position, stick with it and do the outcome analysis by yourself.