Forex Trading The Big Disadvantages of Forex Trading

Forex Trading The Big Disadvantages of Forex Trading

I constantly read articles about the advantages of forex trading but these are actually disadvantages for most traders and that's why 95% of traders lose all their equity quickly and here we will look at the two specific reasons, most forex traders lose...

1. Leverage

Today, you can leverage your investment with an online forex broker by 200, or even 400 to 1 and this creates tremendous profit potential. But it's a fact that most traders actually over leverage and lose.

With leverage you need to be very accurate with the execution of your trading signals and very careful with your stop loss protection. When trading on leverage if you are not careful, a quick equity spike will wipe your position.

In stock trading you can buy and hold and you only risk what you have paid for the stock and so long as it comes back you make a profit and you can wait.

In forex trading its different - you have losses that are open ended and they pile up quickly. You can't just sit back - you need to take action.

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