Valentines Day Special For 50 Traders | 35% Discount Off All Accounts

Use Code:
Shape

How Hard Can It Be To Learn Forex Trading?

How Hard Can It Be To Learn Forex Trading?

The forex market has a rather ruthless reputation. Whilst there is the potential for traders to be successful within the right prop trading structure, there is also a sense that the market is remarkably difficult to learn.

There are two main aspects to this; the first is that forex works very differently to the stocks, bonds and options markets that many traders are used to, which can catch a lot of people off guard by itself.

As well as this, there are a lot of stories of people who entered the market unprepared and were wiped out by small, unexpected market movements because they took an extremely reckless approach to the currency market that is impossible to get away with.

Because of this, it can be difficult to ascertain just how hard it is to actually learn to trade forex, because it is both much harder than some “get rich quick scheme” peddlers like to make out but also easier than it may look when you examine the extremely complex variables that shape the market.

With that in mind, this guide aims to explore just how hard it is to learn forex trading, where you should start when it comes to practical knowledge and the mindset you need to succeed.

Why Does Forex Have A Reputation For Being Hard?

Aside from the horror stories of people who were unprepared for the realities of forex, the reputation it has is primarily caused by the nature of how people make money on the currency market.

Unlike other stocks, which can have remarkably variable price action, a common way to make money with forex is through somewhat leveraged trades of currency pairs, relying on making money through relatively small changes in price.

This means that undisciplined, emotional trading is far less likely to lead to a lucky jackpot run and far more likely to be punished with margin calls and big losses.

As well as this, forex operates at a very different pace to the rest of the market. It is extremely liquid but also moves in small waves rather than huge peaks and valleys.

World currencies, by definition, have to retain a relatively consistent value, otherwise, you are in a final crisis with rampant inflation or deflation of a currency.

They also have to be extremely liquid. If you spend money and especially if you use something like a bureau de change, you are interacting and shaping in a very tiny way the forex market.

However, all of this means that your position and situation can change dramatically from moment to moment, and that can make it difficult at first to understand the types of trading that will lead to success and the types that will lead to very quickly depleting portfolios.

That is not to say that it is necessarily hard to learn forex. Plenty of people have gone from beginners to long-term traders. But at the same time, you need to be prepared for a very long learning experience.

An absolute beginner could learn how currency pairs work and how to set up a trade relatively quickly, but not which factors make for successful trades, how to remain consistent, how to set up a trading plan and how to ensure consistent rates of return rather than wild oscillation.

Ultimately, you should always start out with demo accounts to see how complex it can be for yourself. Keep consistently trading for around six months and see how your demo portfolio gets on. If you manage to successfully trade in the long term, you are far more likely to pass the evaluation rounds at a prop firm.

However, arguably the most important skill to learn when it comes to forex is how to adapt and maximise a patient and analytical mindset.

There are some financial markets where you can get away with being reckless. Typically these are fairly volatile ones where getting out at the right time can lead to massive gains but also massive losses.

Forex is not like that at all, a portfolio needs to be carefully managed, maintained and treated with immense discipline, otherwise, setbacks, bumps in the road and the natural ebbs and flows of the market can lead to significant losses.

Ultimately, forex can be learned, and it does not necessarily require an intensive knowledge of technical analysis to succeed, but it also does take quite a long time to learn without intensive effort, and sometimes patience can be the hardest skill to learn of them all.