Cryptocurrencies have been in the limelight lately with what was trading at $100 ten years on bitcoins to now hovering at a whopping $37,000 USD. While the interest for digital currencies remains high, it is important to realise that most people would still prefer the good old fiat currencies that are backed by the government: for the U.S. that will be USD, and for India that will be rupee.
At a charity dinner between prominent Crypto evangelists and value investors, Justin Sun tried to convince Warren Buffett about Crypto as the future of money. Warren Buffett politely rejected and said “I think my grandchildren would prefer to inherit my wealth in USD dollars.” That goes to show that the world is not ready for mass adoption of Crypto anytime soon.
A surge in Forex Trading
With the pandemic forcing millions of Indians out of job, many are looking for various means to generate job replacement income. One of the popular options is Forex trading because of its high accessibility equipped by fast internet and advancement in technologies to which have made trading anytime and anywhere more possible than ever before.
Forex, also known as Foreign Exchange, refers to the activity of buying and selling currencies for the purpose of making a profit. According to online marketing tool Ahrefs, the term ‘forex trading in India’ has a monthly search volume of 5,000 from Google. Google Trends has also shown a steady increase in interest around Mid-2020 at the time where a nation-wide lockdown occurred.
That said Forex trading is not without risks with many studies showing that 90% of the traders blow up their account. The concept of high risks, high returns ring true to the endeavour Not to mention there are many bad actors in the industry, hence you have to start with trusted Forex brokers.
Here are some of the important traits all traders must have before they start trading.
Trade Plan
For starters, before you even begin looking at the chart, you have to plan out your trade if you want to have any chance of success. A trading plan outlines your trading approaches, from what currencies pairs you should trade to how much position size to take for each trade idea. Without a trading plan, you will be relying on your emotion, and act out of greed or fear which is the surest way to lose money.
Risk Management
The nature of trading means you will be exposed to wild price fluctuations. Your trade value could go up by 50% in one hour, and it could also go down by 60% in the next hour or two. Good risk management means not risking what you cannot afford to lose. For most people when it comes to trading they think of how much money they are going to make, but that way of thinking is dangerous. Instead, you should think about your risk tolerant level and trade accordingly within your comfort level – and never go beyond it.
Find Your Edge
Some people are good with fundamental analysis and macroeconomics, while others are good at technical analysis and reading off price action movement. These days due to social media platforms, sentimental analysis is becoming increasingly popular. Whichever the means of analysis that may be, the key is to find the one that suits you best. Every trader is different. You may start out learning from a mentor which has proven to be an effective way to shorten one’s learning curve, a day will come where you will be your own master by discovering your unique strength and edge in the market.
