Daily Forex #19 - Disadvantages Of Trading Forex
forex·@ryanng·
0.000 HBDDaily Forex #19 - Disadvantages Of Trading Forex
 Trading Forex is fast becoming a popular choice for traders who wish to trade in the financial markets. There are numerous advantages of trading Forex but today I want to share the disadvantages. #### Lack Of Transparency The Forex market is not regulated by majority of the countries and thus dominated by brokers. Most of the time when we are trading, we are trading against the brokers or professionals trading for the banks and financial institutions. This means that there is a lack of transparency and we are not able to have any control on how our trades gets filled. We might not always get the best price and also we don't get the overall view of the trading quotes or volume. We only get data provided by our selected broker. A simple solution is to trade only with regulated brokers. The market may not be under the control of the regulators, but the activities of brokers are. #### High Risk, High Leverage Forex trading is available on high leverage, meaning one can get profit and loss exposure multiple times of the trading capital. Forex markets allow leverage of up to 500:1, so one needs to have only $1 to take a forex position worth $500. While a trader can benefit from leverage, their losses are also magnified. Forex trading can easily turn into a nightmare due to large losses. It is therefore very important that you understand leverage and have a proper capital risk management. Strong control over emotions is also another factor required when dealing with "larger than usual" amounts of money. #### Lack Of Professional Advice/Training In the equities market, a trader or investor can seek professional assistance and advice from portfolio managers, trade advisors, and relationship managers. Forex traders, however, are completely on their own with little or no assistance. Most beginners quit during the initial phase, usually because of losses suffered due to limited forex trading knowledge and improper trading. There are also alot of so-called Forex gurus advertising on social media with their "holy grail" strategy, preying on those who have little or no knowledge about Forex trading and selling them the dream of making millions of dollars in a short period of time. #### Very High Volatility Volatility has pros and cons. The advantage is the ability to make big profits and also numerous opportunities to enter a trade within the same day. Of course the opposite can also happen and a Forex trader can end up with huge losses in a highly volatile market. When countries economies go bankrupt, forex traders holding on to that particular currency can end up with worthless pieces of paper. The 24 hours nature of the Forex markets also make it difficult to regularly monitor prices and volatility. The best approach is to keep strict stop losses for all forex trades and trade systematically through a well-planned approach. Having said all these, like all kinds of investments, proper education and understanding of the Forex market is a must if you want to succeed. ------  ***Daily Forex*** is my way of sharing my personal thoughts on the Forex Industry with would-be traders as well as current traders. I thank you in advance for following my daily blog post and of course an upvote would be a nice motivation for me. It will also be a sign that my content is relevant and have given you a bit of insight on what Forex Trading is all about. Here are some interesting topics to start you off : - [Daily Forex #1 - Will Forex Trading Be Banned](https://steemit.com/forex/@ryanng/daily-forex-1-will-forex-trading-be-banned) - [Daily Forex #5 - How Forex Spreads Work](https://steemit.com/forex/@ryanng/daily-forex-5-how-forex-spreads-work) - [Daily Forex #6 - What Makes The Price Move](https://steemit.com/forex/@ryanng/daily-forex-6-what-makes-the-price-move) ------ If you wish to get more FREE Forex Content, join my [Tradesto Education Group](https://www.facebook.com/groups/144334276152737/). Sign up for a [FREE Steemit account](https://steemit.com/pick_account) and you can thank me by coming back and upvoting this article. And guess what, you will earn Steem ($$$) too for doing that! #awesome ------ Remember to [FOLLOW](https://steemit.com/@ryanng) me too!