A lot of people have come up with a mindset that forex is a scam, this is not true. You have to go ask those people if they really understand forex trading. Many of them do not know or understand forex fully. I am here to tell you otherwise and explain to you how forex is a good way to make money, if not the best way. Forex trading is one of the very few ultimate ways of making good money online at the comfort of your home.
It is just about finding a trading platform that is best and good for you. A great amount of labor required in other professions is not always needed in forex trading. Forex is not affected by external factors; raw materials required in other businesses are not needed in forex trading. Everything is internet based; the simplicity and flexibility you enjoy opening forex are not enjoyed by other businessmen in their businesses.
You have to tame the beast to earn big. What do I mean by this? You have to know how and when to enter and leave a market. You need to learn how to use it to make money. I am not against learning through a demo account but I will advise you not to stay too long on the demo account. You will learn the basic things and ways of trading forex in demo account but you may not be able to learn how to control your emotions when using the demo account.
You need to have it at the back of your mind that forex is one of the riskiest markets in the world, you need to be patient and trade wisely; I believe in slow and steady. One of the reasons why a few percentages of people believe forex is a scam is because of the huge profit they want to make in a few months, which seems unrealistic.
As a beginner, you have to read a lot of books, books on the theory behind trading in financial markets and understanding this theory into becoming a successful long-term trader. You need to join social media groups that talk about forex. These platforms will help you to meet successful people on forex and you have the opportunity to ask those questions on areas you need answers to. You need to find reputable and legitimate courses and traders that are willing to teach and help out without ulterior motives.
You must not join those people with easy money mentality about forex. You have to understand it as a business and a hard one at that. To make money on forex, you have to overcome failures and win.
I have come up with some concrete points to prove and explain to you that forex is a good place to make money:
• Is Trading Forex your way?
• How Safe is Forex Trading?
• Choose a Trading Strategy
• How Profitable is Forex Trading?
• How to Profit from Forex Trading?
• Forex Traders need how much Trading capital?
• The amount of money you can gain Trading Forex
• Ten Ways to avoid losing money in trading Forex
• The Peak Performance of a Forex Trader
IS TRADING FOREX YOUR WAY?
You must take a lot of risks if you want to do forex trading. You also have to understand that the more risk, the higher the potential to make a profit on Forex. You must be ready to take the risk. Successful traders on forex will tell you they took enough risk. Do not get it twisted, not all trades result in profit, you have to prepare for loss day(s). You need to ask yourself questions.
Do I have an appetite for risk? If I lose my first two trades, will I continue? You have to understand that even successful traders make losses. If you cannot handle loss, forex is not for you. While choosing your strategy never forget to consider using risk management. This will lead to risk minimization in trading. This part is one of the most important aspects.
HOW SAFE IS FOREX TRADING?
You have a safe trade when you follow the right trading procedures. The percentage of people that are successful in forex say it is safe while the ones that lost say it is not safe. Obviously, this depends on how a trader acts in the market. A safe forex market depends on you. Below are some ethics you must follow in order to have a safe and successful trade:
1. As a beginner, you must start with a demo account in order to understand how the market works and know your strategies through continues practices. They say practice makes perfect.
2. Choose and know your trading style very well. There are lots of styles a trader can choose from. Ask successful traders, they will tell you they have a particular style they use in trading. A lot of failed traders on forex do not understand themselves and the style that suits them. This, they need to correct and improve.
3. Set your own goals and managing your risk levels are good ways of planning for a trade. You have to plan to become successful and make money on forex.
4. As explained earlier, the strategy is a key factor in trading, have a strategy or strategies you must keep up to date with, to become a successful forex trader.
A beginner that starts trading with the real account (instead of demo account) is more likely not to have a safe trade. A person familiar with forex but not rules and strategy may not have a safe trade.
CHOOSING A TRADING STRATEGY
A particular strategy is needed by you to be able to make a profit on Forex. A trade does not have a wrong or right way of trading. You just need to adopt the one that will favor you in earning good money on forex. Different strategies will work for a certain currency pair in different markets. To become a successful forex trader, you need a high level of discipline.
Many traders experienced downfall because of emotional trading. A strategy you have selected will help you stay focused and avoid such (downfall). Discovering your own strategy comes with experience. Right attitude coupled with risk management and trading strategy will help you in making profits in forex.
How to Implement a Forex Trading Strategy?
As we all know that nothing is 100% sure. I would not lie to you that there is a trade that has 100% profitability. A profitable system with a 75% profit to loss ratio still has 25% losing trades. Execution and management of trade is the art of profitability.
HOW PROFITABLE IS FOREX TRADING?
Trading strategy and risk are the two things that determine how profitable your forex trade can be. Forex trading is done on margin. This means that the size of your deposit can be smaller than the size of your trades. This makes you gain high profits from forex. If you have not been winning on forex, you have to change your level of risk appetite, trading strategy and improve your understanding about forex. People have forgotten to trade for skill instead of a profit. When you do this your profit will come along with your skill.
One of the advantages of forex is that you do not have to pay commissions. There is nothing like clearing fees, government fees, exchange fees, or brokerage fees. Brokers depend on bid/ask spread. There is no middleman in forex; you trade directly with the market that controls the price of a certain currency pair. Spot currency trading does away with middlemen. You determine the size of your position. You do not need big money to start forex.
You can start with as low as $25, unlike stock or other businesses. Forex is opened to average individuals that do not have big startup trading capital. This, forex has done to make it possible for you to be successful and rich. Entities not able to control the market price make it easier to make money from forex. Leverage enables you to make huge profits and also help you minimize your risk capital.
You can never be “stuck” in forex, there is always someone in the market will to buy or sell the other part of your trade. You also enjoy the ability to close your position automatically when your profit level has been reached. Do you have a good attitude for trading? Without a good attitude, it is impossible to make a profit on Forex. This you must correct before engaging yourself in forex trading. Four attributes that check on good attitude and mindset are explained below:
1. Patience: Patience is a virtue a trader must have to become successful. You must wait patiently for the price you have placed on your system for either entry or exit point.
2. Discipline: Many failed traders do not believe in themselves. They are always having a double mind, which is not good. You must be ready to wait patiently until your system triggers an action point.
3. Objectivity: To be successful on forex, you need to be ready to take full responsibility for all your actions. Do not be emotional or influenced by the view of a pundit whenever you see a reliable system that provides you with entry and exit level.
4. Be Realistic with your Expectations: You must be profit-oriented but be realistic with your profit level. For instance, do not expect you will be making $1000 every day on the $250 you invest in your trading account.
HOW TO PROFIT FROM FOREX TRADING?
To make a profit and achieve a lot in forex, you need to buy low and sell high. This is the only way you can make a huge profit on Forex. These purchased assets can be sold without owning them. You have to know what to sell and how to sell them to maximize your profit. I will explain to you some basic principles of forex trading, risk management and trading psychology that will help you in achieving profits in this market. It will likely be hard for you to make a profit on forex without knowing these basics. These principles are explained below:
1. Always use a Stop-loss: Your stop-loss must be set irrespective of your trading strategy. Stop-loss is used to determine the closing price of your trade. When the trade gets to that level, it closes automatically. Stop-loss helps you to control your loss. This parameter is essential if you really want to make a profit on Forex.
2. Do away with Emotions: Emotion they say is trading’s worst enemy. Many failed traders on forex trade it like a game. You have to do away with the knowledge that forex is a game. Never have the mentality of beating the market. A mixture of analysis and discipline describe forex trading. You should not be sad or disturb when you lose positions in forex. Examine them, focus on your analysis and let the rules you have established for yourself guild you. This is important in making a profit from forex. Whenever you feel down or too happy, does not trade that day. Overconfidence is not needed in trading, avoid it.
3. Be aware of current market issues: You have to be updated with forex trading. News and announcement are used to understand the market. Technical indicators identify long trade when you have a reliable trading schedule. Always check if your trade and current news are up to date. This is important.
4. Risk Control: Successful trading is all about controlling your risk. Put your trade-in right direction as soon as possible. Analysis of your trading system, make the adjustment when necessary and never stop trying again. To join the successful forex traders, patience and discipline are required.
FOREX TRADERS NEED HOW MUCH TRADING CAPITAL?
Forex trading is being promoted for a wider audience by taking profit of trading systems, global brokers, and leverage accounts in the form of accessibility. A trader’s ability to make a living is being affected by the capital at his/her disposal. In fact, the role of capital in trading is so, the key that a very slight edge will provide high profits; a trader must be willing to put more capital to work and repeat advantageous trades when you have good conditions. This differentiates professional traders from novices.
To become a successful forex trader, you have to take a great look at performance, fees, and leverage. Remember, the more capital you put, the more money you earn but consider the risk level of the capital before putting it into the trade.
THE AMOUNT OF MONEY YOU CAN GAIN TRADING FOREX
A lot of people often ask this question. The simple answer is nobody actually knows the exact figure you can make. Your skills in forex will give you an edge in making a huge amount of money from forex.
The exact amount of money you make depends on your activities in the market. As we all know that the market is unpredictable. How good are you in the market? There are months where there seems a big downpour of opportunities to make a profit. On the other hand, there are months that are so dry of opportunities. A successful trader always takes full advantage of months of a big downpour of opportunities to make huge money. This will serve for the rainy days.
TEN WAYS TO AVOID LOSING MONEY IN FOREX
1. Do your Homework-learn before burning:
Do not avoid the due diligence because forex is easy to get into. To be successful, you have to learn forex markets. You learn through live trading and experience. A trader that wants to succeed in forex should not any stone unturned in his/her learning process. Knowledge about geopolitical and economic factors that affect a trader’s preferred currencies should not be left out. Part of your homework is to know how to adapt to changing market conditions, world events and regulations. You must develop a trading plan. Your plan must contain screening and evaluating investments and also determine your risk level; the amount of risk to be taken.
2. Do not hesitate to look for a reputable broker:
A forex trader must only open an account with Natural Futures Association (NFA) that is registered with the U.S Commodity Futures Trading Commission (CFTC) because of the safety of deposits and overall integrity of a broker. You might be wondering how I meet these brokers. Every country outside of the United States has its own regulatory body in which every legitimate forex broker is registered with.
3. Practice with a Demo account:
Trading platforms (if not all) have a demo account you can practice with. You place hypothetical trades without funding in this type of account. You become familiar with order-entry techniques when you practice with this demo account.
4. Always have a Clean Chart:
As a beginner, do not make use of all the technical analysis offered by the trading platform. It is advisable to keep analysis techniques to a minimum to make them effective. You should avoid using multiples of the same types of indicators (e.g. two volatility indicators or two oscillators) because they can become redundant and can also give opposing signals. You should also remove from the chart any analysis technique that is not regularly used to enhance trading performance.
5. Your Trading Account must always be protected:
You must have good money managing techniques to become a successful trader. One good thing is you can enter a position at any price and still make money. Trailing-stops are one of money management techniques that can be used to preserve winnings while still giving a trading room to grow.
6. It is advisable to Start Small when Going Live:
After you have done your homework, spent time practicing with a demo account and completed your trading plans. You may then decide to go live and make cool cash. This is good but starts small when going into real trade because no amount of practice can stimulate real trading. When you start small, you are able to control and evaluate your trading plan and emotions and gain more practice in executing precise order entries in order not to risk the entire trading account in the process.
7. Make use of Reasonable Leverage:
Leverage has made forex trading unique to participants. When properly used, leverage can provide the potential for growth. A success-oriented trader will open a large position in order to maximize leverage. But, also make sure you are having reasonable use of it and not over-using it.
8. Have good Records:
Trading journals provide important feedback about your trading activities when you keep a record of everything. The essence of the feedback is to correct you from making the same mistakes that can prevent you from becoming a successful trader.
9. Know Tax Implications and Treatment:
You must be familiar with tax law and prepare at tax time. Tax specialists or qualified accountant to prevent any surprises. Tax laws are not stable but change over time. This is the more reason why you must develop a good relationship with a trusted and reliable professional to help build and manage the related matters.
10. Trading should be treated as a business:
Until you start believing and taking forex trading serious before you start making money on it. You need to plan and know how you are going to run it.
THE PEAK PERFORMANCE OF A FOREX TRADER
The dream of every trader is to become a millionaire by putting intelligent bets in the form of a small amount of capital into trading. You have to understand that you cannot become a millionaire in a short timeframe when trading a small account but can build up over time and be successful as you want.
Traders with small accounts feel pressured when they use large amounts of leverage to accumulate profits over time. Studies have shown that professional fund managers with millions in their hands make less than 10% or 15% yearly. An ideal trader with small capital can double or make more money in a single year than these managers. A trader must be skilled just to break even when factoring fees, commissions and or spreads into expectation.
For instance, an E & S E-mini contract, let us assume fees of $6 per round trip trading one contract and that a forex trader makes 20 round trip trades per day. In a month with 21 trading days, $2520 will be spent on commissions alone, others fees like the internet, entitlements, charting or any other expenses are not being mentioned, which may occur during the course of trading.
The goal of every trader is to make a living off their activities. Every trader must look at their average profit per contract to know how much they need to put in order to meet a given amount of expectation and take the direct amount of risk to control significant losses. Many traders have failed to know that slight edge like averaging a small pip profit in the forex market can yield to substantial returns. Traders must learn to adhere to take less amount of risk.
An average trader with a small amount of capital is advised to use leverage so that they can participate in a high capital required market. To support a livable wage, a trader must provide enough money to the account.
Forex is one of the best places to make money. You do not have to stress yourself in looking for big capital to start a business. With forex, you can start with little capital you have ($25 dollars). Unlike the capital intensive businesses, you trade at any convenient time you like. All need to do is to understand you. You must know the right time to enter a market and the right time to leave the market. You do not have to deal with any agents; you trade directly and make your cool cash.
Do not be like the few failed forex traders that have a low mentality about forex. You cannot become rich and successful overnight in forex. You need to do lots of homework. Meet brokers to understand forex trading better. Do not neglect their advice as it will increase your potential of winning big on forex. I will advise you do not trade if you have not fully understood forex trading very well.
Erase the mindset of winning the market; do not let emotions make you lose money. A lot of traders have fallen victim of this. When the market is not looking good for you that day, quit for that day and goes examine your trade for that day. Search for the reason why you lost and take steps on how you can correct it. Trade only with money you can do away it.
Many traders have become so sure of a trade that they put like 80% of their fund in the forex market (this is not advisable). You must also believe that you can make huge money from forex. This is the first thing you must work on. You might have undergone a lot of forex training, practice so hard and plan so well but if self-belief is not in you, you cannot go far in forex.