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Why do you think people are scared of investing in forex?

Discussion in 'General Forex Talk' started by galaxytrades, Apr 24, 2013.

  1. MartinK

    MartinK Recruit

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    in my experience i have found that they don't know what 1% is to begin with

    Example :
    Retailer Trader starts Trading EURUSD for example, with account balance of $400 for example
    doesn't know what a LOT is
    Doesn't Understand how Nominal Margin works
    and let's not even get into leverage

    so, they hear through the grapevine that 1% is the ideal risk level
    so. they do this
    1% x $400 = $4
    but then the following happens

    1. they don't understand the relationship between the 1% Calculated Loss vs a Stop Loss and where it is placed
    2. they don't understand that Moving the stop loss lower (on a buy) and conversely on a sell affects this %
    3. they usually have no clue as to what Nominal Margin is,

    so let's say that their Nominal Margin is $300 to enter the trade and yet they think they are risking 1% hehe
    when i fact they are risking more like 80%ish of their account

    Best Case Scenario, they think they are risking 1% which is say $4 from their $400
    Meaning they have $396 Remaining
    however they actually end up risking, like $7 and THEY DON'T SEE IT AS A BIG DEAL, but what they dont' understand is this is nearly 2% of their risk
    meaning... if 1% was the risk, they are able to lose 100 Trades in a row
    with a 2% risk THEY JUST HALVED THAT NUMBER without even realizing it

    and the reason why this happens is.. THEY LACK BASIC FOREX EDUCATION and Basic Mathematical Skills
     
  2. Nickluder

    Nickluder Recruit

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    People are afraid to invest in forex for different reasons, one of the, is that they don't know a lot about this market, and uncertainty is itself off-putting. Also, the negative experience of other people is very influential.
     
  3. Bvikech

    Bvikech Recruit

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    Majority of people are unaware of forex market and business. You need to have small amount for this business. Other people do not have facilities of internet and computer. They are scared of loss in this investment. Due to lack of knowledge and experience people are scared of investing.
     
  4. TrapLok

    TrapLok Recruit

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    People are scared of investing in forex trading because forex trading is a difficult thing to understand and it is in the nature of people to fear something that they don't understand. Besides this, people are scared because of the losses people have suffered in it.
     
  5. Froso@FXNET

    Froso@FXNET FxNet.com Representative

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    Forex market not works on fix rules , it is not easy to do even after learning we face many difficulties as main issue is analysis . Analysis making need a long journey of practice and thinking that result in a choice for trading. If your analysis is not good how you will proceed for profit taking.
     
  6. CryptoatForex

    CryptoatForex Recruit

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    It is a very volatile market and I think it is good that people are scared. It will make them respect the market and not think it is easy to profit.
     
  7. nahiyar

    nahiyar Private, 1st Class

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    You are right there is no doubt forex is highly volatile market but not always. You can choose normal market as a starter. It is risky business . when one is eager to do forex he must learn all ups and downs of market. He will certainly make some profit . Fear is with every trader , that can be trained by practice then he will feel no scare because he knows how to deal with unfavorable market.
     
  8. Quinuiacl12

    Quinuiacl12 Recruit

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    I think that the biggest reason is that don't know much about forex trading. They think that it is blackhole for losing money. They need to spend some time in learning about trading and then pass their judgements. Don't give importance to such people's views. They will try to bring you down.
     
  9. nahiyar

    nahiyar Private, 1st Class

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    People firstly are energetic to invest in forex, They had more expectation but when they loose in this business they feel afraid of investing again in forex trading. This loss is du e to many causes as lack of knowledge , practice and skill . If they get command on basic rules of forex trading they will certainly eager to do forex business as regular business.
     
  10. alexmarian

    alexmarian Private

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    The simple reason is the loss factor in no time. Normally the new comer will join forex with enthusiasm but once they feel sudden and big loss they start feeling the fear of losing money in quick time.
     
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