How Traders View the Global FX Exchange

The global FX exchange market is full of mystery, facts and myths. To the average trader however, it is a very real thing, where they can test their trading.

Why Traders Consider the FX Exchange as their Ultimate Trading Test

The FX exchange is to may traders, more or less, the ultimate trading test, where skills are tested and myths are busted. Though all kinds of markets and trading methods are tough, nothing comes close to the forex market, because participation is strong, and comes from all over the world. Opportunity for making a big profit is much higher as well. When compared to stock trading, a trader may have inside information, or just information from the trading floor. When it comes to the forex market, all forex trading strategies, for all participants, begin from the same level. No one can have specific advantage over the rest of the participants, because everybody can gain access to the same sources of information. Trading tends to become very technical, on most days, and very confusing during certain hours. That’s why it is considered to be the ultimate trading test. Market participants in the forex market are simply connected through their common forex charts, but trading itself is about as fair as it can possibly get.

Why the Trading through the FX Exchange is So Tough to Master

The FX exchange is very hard to handle at times, so much so that even veteran traders have days where they have to quit trading due to excessive confusion. Those who manage to learn forex trading, to a very profitable degree, do so because they manage to spot profitable, yet low risk trades. These trades usually are found at times where the majority of other traders are confused, and generally currencies trade with increased volatility. Excessive volatility creates all kinds of panic, fear and triggers stop loss orders, creating even more volatility in the process. Traders who lose most during volatile times are traders using tight stops, or who focus too much on intraday events. Whereas, the most profitable traders are the ones who use massive stops, and who can sleep well at night with an open losing trade on. Despite the overnight risk theory, which is more of a myth than a reality, most profits can actually be made overnight. Sometimes, favourable price movement might happen early in the morning, but way too early in the trader’s local time. So day traders tend to miss out on such movements. The forex market is tough, and day trading is even tougher, so much so that most traders tend to fail. Those who make it through though, gain a lot of confidence, they are used to extreme volatility. So even if these traders attempt to trade stocks or commodities, they find risk management much easier to handle.