As many of us have either read or heard about the recent news of six big banks paying a combined $4.3Billion to settle allegations that they had conspired to rig the global currency markets. Assuming that this bad behavior has even stopped Forex trading for the small individual trader who possesses little or no knowledge of the market has the deck stacked against him. According to the Wall Street Journal researchers Rawley Heimer an economist at the Federal Reserve Bank of Cleveland and David Simon of Berkeley research in California they state no matter what you invest in, you can’t get better at it unless you focus on the one thing nobody likes to pay attention to: your losing bets. The researchers tracked trading on a social network operated for individual Forex traders. The site tracks trader’s positions rank the traders relative to each other and enable them to chat online. The site providing the data received anonymity as a condition of the study. What they found was the most successful traders are nearly 50% more likely to talk about their trades than the least successful are. In addition the other traders they tell about those winners trade 20% more often than usual in the following week. When talking about their trades the losers remain silent while the winners are shouting it out. Hearing more about the winning trades gives a distorted view of how well a trader actually is doing. According to the NFA (National Futures Association) a study of retail Forex traders they found that 72% of these individual accounts were unprofitable and that the average life of an account was four months. Two out of three people trading Forex are losing money. Also interesting is that individual Forex traders in the USA generated about $12.6 billion in average daily volume in 2013 and are likely to surpass this figure in 2014. Recently total daily turnover of all Forex trading done around the world is $5trillion which makes the Forex market the largest trading market in the world. A retail trader may think about having a managed account while developing his skills as a trader. It can be a good hedge in what could be a long road to success.
Content Provided by Barry Sendach President of Forex Global Solutions
Quote of the day: ”The difference between genius and stupidity is that genius has its limits” Einstein