There are a number of reasons why you might choose not to trade forex. Here are six of the most common:
1. You don’t have the time.
Forex trading can be a time-consuming activity. If you’re not prepared to put in the necessary hours, it’s probably not the right investment for you.
2. You’re not familiar with forex trading.
Before you invest your hard-earned money in something, it’s important to understand what you’re getting into. Forex trading can be complex and difficult to master, so if you’re a novice, it’s probably best to steer clear for now.
3. You don’t have the funds.
While it’s possible to start with a low bankroll, if you don’t have enough money to fund your account for at least three months (the average time it may take to break even), forex trading is probably not right for you.
4. You prefer the simplicity of stocks and bonds.
Forex traders often look down on stock market investors because they consider themselves more sophisticated or because they think that the stock market is too complicated. If you’re looking for simple investments that can be understood by anyone, then stick with traditional securities like stocks and bonds. Forex trading might not be your cup of tea.
5. You have an addiction problem.
If your only motivation for forex trading is making quick profits, you should not trade forex at all. This is a zero-sum game i.e. there cannot be any gains without losses and it’s easy to lose money when the market goes against your position.
6. You have a lot of debt or bad credit
If you already have a lot of debt, then taking on more might just put you in a worse financial situation. If you’re going to start trading forex, make sure that your current financial situation is stable first because this might just add fuel to the fire if things do go wrong. In addition, consider your reputation as well – aren’t you concerned about ruining it? For example, if one day you need to ask for a loan from someone close to you, a bad credit score will reflect negatively on you.
7. You can’t handle when you are wrong
You have to be willing to sit through your losses and not allow the fear of losing money to impair your ability to make good decisions. If you can’t handle when you’re wrong and exit a trade too soon because it doesn’t feel right, then this is probably not the best place for you to invest
8. You don’t know what you’re doing
Although forex trading is becoming more accessible by the day as new platforms emerge, knowing how to trade forex still requires some knowledge about markets and how they work. If you think that all investments are nearly as simple as buying one product and watching it rise in value, then investing might not be for you
9. You really can’t afford any losses
Forex trading is a risky business so if you lose one month’s pay, you’re going to have a hard time recovering from it. Before you start trading, make sure that you can weather the storm and that you won’t be devastated emotionally or financially if things don’t go your way.
These are just a few of the reasons why you might not want to trade forex. If any of them apply to you, it’s probably best to stay away from this investment for now.