Many people start their trading journey in this market for obvious reasons: high leverage, low starting money, open 24/5, low manipulation due to the high liquidity,...
In my opinion this is exactly the problem for most. They start with just a couple of bucks and wanna build that up into some serious money in a short period of time. So, they start with every system they can find, preferably intraday systems with flashy indicators, cause otherwise it wouldn't even make sense to trade cause of the small profits. Macroeconomic fundamentals are totally ignored cause on such a small time-scale the impact of some news reports are difficult to predict and to analyze. There is also a lack of choice, cause so many pairs are correlated giving you only a handful of opportunities. In the end accounts are blown one after the other.
So, we got a lack of choice, ignorance of fundies and trying to daytrade the crap out of the market leading to account depletion over time. We got now several options: we either find a positive expectancy price model (from my experience quite hard to find), we give up the journey, we try to go longer-term incorporating fundamentals (which will probably not give the profits desired, since real opportunities are not there every day), or we finally start taking wealth management seriously and open ourselves up to other asset classes.
And I think the last point is actually where the journy should ultimately go. Of course the last option is also the hardest and most time consuming, cause it means that you finally have to get off your lazy ass and start reading company reports, doing research on demand of coffee,... But then the opportunities are endless, once you can trade all kinds of world or company events. There are so many opportunities out there when incorporating stocks, futures, bonds or even real estate. Then you can really make some informed decisions which are not only based on price, but also on reality/fundies and just wait for the best opportunities to flourish. And you finally have choices, which I find the most compelling argument. You are no longer forced to just trade 6 currencies and you can also enjoy the comfort of trading medium to longterm.
Of course when you start trading so many asset classes it requires you to start with more than the usual 500 bucks, but I think the journey is in the end much more rewarding than just sticking to forex.
In my opinion this is exactly the problem for most. They start with just a couple of bucks and wanna build that up into some serious money in a short period of time. So, they start with every system they can find, preferably intraday systems with flashy indicators, cause otherwise it wouldn't even make sense to trade cause of the small profits. Macroeconomic fundamentals are totally ignored cause on such a small time-scale the impact of some news reports are difficult to predict and to analyze. There is also a lack of choice, cause so many pairs are correlated giving you only a handful of opportunities. In the end accounts are blown one after the other.
So, we got a lack of choice, ignorance of fundies and trying to daytrade the crap out of the market leading to account depletion over time. We got now several options: we either find a positive expectancy price model (from my experience quite hard to find), we give up the journey, we try to go longer-term incorporating fundamentals (which will probably not give the profits desired, since real opportunities are not there every day), or we finally start taking wealth management seriously and open ourselves up to other asset classes.
And I think the last point is actually where the journy should ultimately go. Of course the last option is also the hardest and most time consuming, cause it means that you finally have to get off your lazy ass and start reading company reports, doing research on demand of coffee,... But then the opportunities are endless, once you can trade all kinds of world or company events. There are so many opportunities out there when incorporating stocks, futures, bonds or even real estate. Then you can really make some informed decisions which are not only based on price, but also on reality/fundies and just wait for the best opportunities to flourish. And you finally have choices, which I find the most compelling argument. You are no longer forced to just trade 6 currencies and you can also enjoy the comfort of trading medium to longterm.
Of course when you start trading so many asset classes it requires you to start with more than the usual 500 bucks, but I think the journey is in the end much more rewarding than just sticking to forex.