Most people love forex trading. We would not be doing it if we didn’t. However, no matter how much you love something, there will be things that you do not love about it. When it comes to trading, although we may love it, there are certain things about it that we are not fans of. We have listed some of these things, along with tips for how to avoid them, whenever possible.
Missed Stop Losses
We all use stop losses on our trades. If you do not, then you should. The stop loss is there to protect your account. It is there to ensure that the trades do not go too far into the red when the markets go against you. Many traders seem to think that these stop losses are set in stone. The sad truth is that the markets can in fact move below these levels without it closing and so the stop loss will close at a larger loss. This normally occurs during times of low liquidity and high volatility. The markets will simply jump below the stool loss level and close out at a lower level. This can cause havoc on our overall profits and risk to reward ratio, but it is something that we are going to have to live with, even if we do hate it.
The Markets Move The Wrong Way
As a forex trader, we watch the news, we look out for economic announcements, and generally keep on top of world events. We know that these events can have an effect on the markets and generally the markets react in a way that can be at least slightly predicted. Bad economic data should make something move down and good economic data should make the markets move up. There are however occasions where the markets just seem to do the complete opposite, for no apparent reason at all. Why this happens, many traders are not sure, the sentiment may just be too high. But when some really bad economic data comes out, something that would normally cause the markets to quite severely drop down, and the markets instead move upwards. This can cause frustrations, especially if trades were put on based on the economic data. This movement against expectations is certainly a cause of major frustration when it happens.
Unforeseen News Events
The economic calendars are fantastic. They give us an idea of what news events are coming up, and what currencies the news will affect the potential impact that they can have on the markets. This enables us to prepare and to stop trading if the conditions won’t be suitable for our strategies. The problems arise when a major piece of economic news comes out of the blue and there is no warning. These news events can cause the markets to jump or even trend, and when it is not predicted or there is no warning. This can catch you out, especially if you are not at your trading terminal and not able to make any adjustments. These news events can cause havoc can lead to losses, which is why we as traders hate them so much.
This is only relevant to some brokers but isn’t it funny how deposits are instant, but it can take up to a week to get your money out. This can lead to a lot of frustrations, especially if you need that money for something. Many brokers are now moving towards same-day or at least next day withdrawals which is great, but there are a lot of them still stuck in the past with long delays to withdrawals. It is frustrating to wait, even if you do not need the money, the wait is something that we hate. Of course, you should not be trading with money that you actually need, so the withdrawal length should not affect your life. Still, it can be a source of frustration, as it is our of money after all.
Scams and Frauds
There are a lot of scams out there and unfortunately, they are giving the idea of trading and forex a bad name. With so many of them from brokers, fake money managers, fake social trading platforms, and more, it is certainly a minefield. Unfortunately, a lot of newer traders seem to fall for them, looking for quick and easy profits. They fall for a scam and then publicise the fact that they were scammed, giving people outside the trading world the idea that it is full of scams and that anyone that trades is potentially a scammer. Legitimate forex traders seem to hate those fake traders simply because of the reputation that they are getting and the reputation that is spreading to the legitimate traders too.
If we want to make money there will be risks. Risks are a part of trading, but it is still something that we see a lot of traders say that they hate. We all have different risk tolerance levels. We can all handle different amounts of it, but it will be there with every trade. So while some traders may hate it, it is there, you can reduce the risks but there is no way of removing it completely apart from not trading at all. We all hate certain risks, but when it comes to trading, it is, unfortunately, a necessary evil that we will need to live with.
Those are some of the things that we go through as traders that we absolutely hate. Hopefully, you won’t experience some of them, but we are sure that you will experience at least one of them at some point in your career. If you do go through them, remember that much is out of your control. Do what you can to get past it and to rectify anything that may have happened. It is not the end of the world, even though we do hate it.