Forex How to Trade: Why do you lose money in the Forex Market?


What is the real problem?

Mainly because don't understand de leverage e Lot Size. Leverage is a “perk”Very powerful and dangerous when you decide to trade in the Forex Market. With just a few hundred dollars you can open positions that are reaching 100.000 dollars or more. When a trade goes well, you can profit from it. When trading goes wrong, you can run out of funds in a short time. That's why new traders should start with sizes of lower leverage e Lot sizes smaller preferably - Micro Lots (0.01) or even Nano Lots (0.001). It is not a good idea to start investing in the Forex Market with a high capital. It is easier to learn from smaller capital.

Let's look at the examples of Lot Size and Leverage.


Lot Size

The more lots open in a position the larger the capital being invested in that position.


Forex Leverage

Higher Leverage Increases Risk of Losing Capital

In conclusion, to be successful in the Forex Market you will need to balance the use of Leverage with Lot Size in order to protect its capital. This is one of the secrets to succeed in this market.


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