Most investments made today including those in the Aussie Forex market are looked at providing profit to the investor in the future. Yes it is possible to carry out trades throughout the day but you need to be aware when trading on the Forex market that it is extremely volatile. Therefore the risk of you losing money is as just as great as earning it.
Any successful trader involved in the Aussie Forex market will know that movements can occur throughout the day. Yet they prefer to trade over the long term rather than the short term. The problem with trading within very short periods of time on this market actually will cause the amount of profit you can make much narrower.
Certainly those who prefer to trade on the Aussie Forex market over the short term will intentionally limit the amount of profit the earn. However they do go along with creating unlimited losses for themselves. So it isn’t any wonder that such traders end up achieving poor results when involved with this market.
The problem is that many such traders aren’t in a position where they can get out. This is because they think that it will be possible to make money throughout the day by catching the up and downward movements as they occur in the market. This may seem quite logical to you because it means that you won’t be leaving any positions open overnight. Also it means that you won’t need to spend time having to rely on any news events or major changes in the Aussie Forex market because it means you are limiting the risks involved.
However as a trader thinking in this way is wrong, and below we explain why.
1. Your risk may be under control but the only control you will have over it is through stop loss points (point where a position closes). There is every chance that on the following morning when the Aussie Forex market opens that a gap exceeding your stop will have appeared. Although this is quite rare by choosing to use stop loss orders to close trades which are making a loss can help to limit just how much you do lose.
2. As soon as you set a position using stop loss points you are in a position to decide just how much money you do lose. Time isn’t an issue as the stop loss point is what will help to limit the risk incurred. The risk incurred will remain the same whether you buy when the price is high or low in the Aussie Forex market.
3. By refusing to set positions overnight will actually limit the amount of time that your investment is then allowed to grow. Okay sometimes the Aussie Forex market may open up against us, yet more often than not the market actually does open up in our favor.
If you aren’t willing to learn about sticking with certain positions in the Aussie Forex market then the chances of you seeing a good return on your investment is greatly reduced.