Should I Quit Forex?
Questions To Ask Yourself Before Quitting Forex
Forex investment is as popular as ever due to low barrier to entry, near-constant access to the Forex markets, and the potential to capitalize on massive amounts of leverage. The goal is converting small sums of money into huge profits. However, it's not difficult to lose hundreds, thousands, or tens of thousands of dollars (and possibly even more) more quickly than you ever imagined if you're not wise, strategic, and thoughtful with your Forex trading or using a reputable forex partner like Roboforex.
Quitting forex should be considered only if you have completely exhausted all conceivable chances for advancement. The decision to stop trading forex differs for each individual and is largely influenced by environmental circumstances, such as other obligations, mental capacity, and financial circumstances.
The typical trader thinks that all it takes to be profitable is to spend enough time in front of the computer, identify the indicator that provides him with the greatest entries, and wait for the markets to return to normalcy. Trading is challenging, and it takes years to become a successful trader. Yet 99% of traders never reach that point, even after years of trading. If you have been trading for a while, you surely know some people who, despite trading for many years, still appear to be bloody amateurs and are still far from successful traders.
There are a few questions you may ask yourself to help you make sense of your current position before deciding whether or not to stop trading in forex.
Are you struggling financially?
You should stop trading immediately if you are in debt or unable to support your daily needs. Trading doesn't operate similarly to a job that provides a regular salary with a set payout each month. There may be months when you make almost no money. Even worse, you could lose more than you initially invested in your trading account.
Stop trading now if you're struggling to make ends meet or are in debt. The worst thing you can do is borrow money to trade, so don't consider doing that. When you borrow money to trade with, it's money you absolutely cannot afford to lose. Even worse is the emotional toll it takes on you. You'll continue to make terrible trading choices.
Therefore, avoid trading if you are in debt or having trouble putting food on the table.
Have you traded for years without making any money?
Do you have any real success in the Forex markets? This is one of the most crucial questions you need to ask.
Some folks are drawn into forex trading by the promise of simple access and practically limitless riches. They dive headfirst without realizing that success in the forex market necessitates strategic expenditures and effort. This might not be for you if you haven't had any luck trading on the Forex market, especially if you've been doing it for a while and haven't made any money. It's critical to comprehend how long it takes to learn to trade forex and control your expectations. In reality, getting the hang of things takes longer than a year on average, let alone achieving significant levels of profitability.
Is your ROI poor?
This largely applies to short-term and day traders who quit their day jobs to engage in trading.
Assume that your former work paid about $25 per hour, whereas you make about $5 per hour day trading. Being a day trader is not rational in terms of ROI. Why not stick with the better-paying work you had before? You might be able to trade off the longer schedule. You can still trade the markets, but at least your time and money are put to better use. You should consider this; if you value freedom more than most people, this may not apply to you. But for the vast majority of you who value time and money, consider the ROI. Does taking this course make sense? Or is there another option, such as working full-time and switching to part-time in the future? That can be a different option to think about.
Do you frequently alter your trading strategy?
The second biggest mistake traders make is thinking that their trading method is ineffective when experiencing a loss. You have to start over each time you alter your trading method. A profitable trading strategy is something you have to establish and constantly improve on—not something you happen to stumble into by mistake, and that starts working immediately.
Are you mentally exhausted?
When your mental resources run out, you'll give up trading. The ability to keep trading, endure setbacks, overcome drawdowns, and end a losing streak are all examples of mental capital. However, when you run out of mental stamina, perhaps after blowing through several trading accounts or after years of trading but with no noticeable progress and growing fatigue, this is the moment to stop.
Everything is fine. Not everyone is suited to trading. Your skill might be more useful somewhere else. You might be the next Michael Angelo, the next mathematician, the next person who can create a fast car, etc.
Are you keeping a journal?
You are destined for failure if you still don't keep a trading journal. You are in much more trouble if you suddenly claim that you do not require a trade journal. You cannot advance and become a successful trader without journaling.
Are your trades planned?
You are putting yourself up for failure if you go to your trading desk without knowing what to look for. Being a successful trader is out of your reach if you constantly switch timeframes in search of an entry signal. Market research and trade planning should take up your weekends and the hours before and following trading sessions.
Are you moving closer or further away from your objectives?
You need to consider if you are genuinely moving toward your goals or being driven further away from them.
The decisions you make in forex might not all pay off. However, it should guide your trade, assist you in making future decisions that are wiser, and inevitably bring you ever-closer to your Forex investment objectives. If that doesn't work, it's time to try another approach. Many excellent forex courses help you discover and use new trading methods.
Do you think trading will soon make you wealthy?
Trading is not a quick and easy way to get rich. Even the possibility that you will ever be able to earn more money than you do at your present job is debatable. When traders discover that trading doesn't work that way, they are more likely to give up than those who don't believe trading can make them wealthy. You have a chance if you can accept that it will take another 5 or 10 years before you can support yourself by trading.
When the anguish of losing money is too great
If you find it difficult to fall asleep due to the pain of losing money, you should stop trading. You could be able to invest your money in bonds or another type of fixed deposit. This has to do with comprehending who you are. This is not something for you if the agony of losing money causes you to have a lot of restless nights.
Do You Still Enjoy Trading Foreign Exchange?
Forex trading can be very difficult and time-consuming, but it can also be a lot of fun. Something is fascinating about observing how global currency markets fluctuate and alter in response to events in our environment. Additionally, there is a huge amount of money to be made in forex. It may be time to pull the parachute and leave trading if you aren't enjoying it any longer and are instead starting to dread opening your Forex broker account.
Why do many currency traders lose money and quit?
Many Forex traders will lose money, and many of them will give up as a result. Some studies on the behaviour of Forex traders suggest that within the first five years, 70% of all Forex traders will leave the market.
But if you don't want to fall into that statistic, you'll need to ensure you're doing it appropriately.
Avoid:
- Uncontrolled trading and speculative trading
- Unplanned trading and attempting to follow each new Forex fad without any rhyme or reason
- Locking yourself into a static strategy in the Forex market prevents you from moving as the market does.
- When you are close to a breakthrough, unrealistic expectations may cause you to want to give up on forex.
- Inadequate or unrealistic risk management.
- Failing to recognize bad transactions before making them, and in particular, failing to learn from bad trades after making them
Conclusion
To sum up, you should only truly give up on forex trading if you are certain it is not for you or if your circumstances demand that you do so. Otherwise, you should regularly assess your progress toward your goals and be ready to attempt a new approach if your current one isn't working. Finally, remember that most traders lose money, but this does not preclude you from joining the profitable minority. Just be sure you're following the instructions exactly!