So you want to learn Forex trading? You need to have a bit of time to dedicate to trading and it helps if you have some idea of statistics or Maths and general money management. It also helps if you also understand how much time you can commit to learn Forex trading as this will ultimately determine what kind of trader you will be, i.e. day trader, scalper, etc.
Can you make money in Forex? You sure can. Is it gambling? Not if you understand price action and know what you are doing. That being said 90% of traders are failing, the primary reasons are, not enough time to trade, not enough capital and the use of robots to trade and poor money management.
In a short sentence, forex trading is the trading one currency for the next, no different from going to Italy and trading pounds for Euros at a particular price.
How do I avoid failing in the Forex market?
1. Have enough capital (£1000 or $1000 at the very least). Not to say you can’t trade with less, some providers offer bonuses on deposits but think of these as a loan that you can leverage on. Having descent capital means you can risk more, leverage more and ultimately earn more at the same time handle draw-down from losses. Oh yes! You will loose. Just gain more than you loose. Sound familiar? NET PROFIT!
2. Have time. If you have a day job, it might not be a good idea to be a day trader, this works best for entrepreneurs and people with time. Like any science you must spend the time. It is a sacrifice! Having said that, the Forex market is 24 hours so there may be an opportunity to trade in other sessions.
3. Never use robots, it is ridiculous to even think a computer can follow price action determined by human behaviour that for the most part is irrational. This will loose you money more than it will make and like a thief in the night it will make you sorry. Don’t do it! Despite what you may hear… Besides you will never really learn forex trading.
4. If you are feeling a little hesitant then you can always open a Forex Demo account. This is a great way to Learn Forex trading and also understand position sizing. Most brokers have Demo accounts and at least you have no real capital at risk.
By meeting the above criteria I am more than certain you will enjoy your journey into the Forex world and also be well on your way to learn Forex trading.
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