Past Performance Not an Indicator of Future

forex-performance.jpgCurrency trading is risky. Because of its volatility, it is important to remember that currency trading is very risky. Indeed, forex trading is considered one of the riskier forms of trading. Rather than being a true investment, it is actually speculation.

 

This means that you will need to do what you can to limit your risk. This can be done with stop loss orders, and by learning about retracements in technical analysis, and how to interpret them. But, as always, nothing is ever fullproof, and you should be careful not to hazard money in forex trading that you cannot afford to lose.

 

Past performance is not an indicator of future results since the FX market is volatile, and the direction could change, no matter what the technical analysis and the trends seem to reveal. This could result in loss, sometimes very large losses.

 

The keys is when you are working out a currency trading strategy is looking for trends. The whole point of analysis is to help you use current and past performance to find forex trading trends and get an idea of how a currency pair is likely to perform overall.

 

 

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