The Realities Of Trading Forex – Part 1

Before you go into trading currencies, you must take into consideration some basic facts about foreign exchange. Almost 100 percent of people who go into trading lose money or trades. This is mainly due to poor planning or having poor money management rules. You must spend more than enough time in planning and training. Also, being a super perfectionist will not help you. On the contrary, it may give you a hard time adjusting to trading.

For those who are unemployed, have low income or even those who cannot even afford to pay their electric bills, foreign exchange trading is not for you. To start a “mini” account, you would need at least $10,000 dollars, which you can afford to lose. The $10,000 is for a mini account only. It is more advisable that a trader should at least have a standard account of $100,000 or more before starting to trade. And this is only a modest start. With a low trading capital of a few hundred dollars, you cannot expect to become rich through foreign exchange trading. As you have come across this beginner’s e-book, forex is traded in lots. In forex, money begets money. The more money you invest, the higher chance you have of getting bigger profit.

Because of its enormous size and liquidity, the Forex market has become one of the most, if not, the most popular market for speculation. It has a tendency for currencies to move in strong trends. But you will be surprised, real success has been limited to very few traders only.

Many traders come into this field hoping to make lots of money. But if you lack discipline required for trading, you are hoping against hope. You need the necessary discipline to succeed in trading. Also, it is important to remember that short term trading is not for beginners or amateurs who do not even fully understand trading strategy. Short term trading is not a way to get rich quick. To make big profits, you must also be prepared to take big risks. A trading strategy involves a high degree of risk. This means you will be suffering the consequences of inconsistent trading performance, which often leads to large losses.

To be successful in the field of foreign exchange trading, you need to learn the skill. Forex trading is a skill that takes a long time to fully understand and learn. It is a fact that even some expert traders with years of experience in trading still suffer periodic losses. If you want to succeed in Forex trading, always remember that it takes lots of time to master. It also entails diligence and hard work. There is no shortcut to trading. You can request your broker for several demos because they are free, anyway. Continue practicing on demos until you feel you are comfortable and about ready to start trading. For a start, it is suggested that you concentrate on one liquid major currency pair. For a beginner, it might become complicated to keep tabs on more than one currency pair.