By Tom Grennell
I believe forex trading attracts a lot of individuals who believe they can make money online fast. I hate to burst your bubble. It is a very difficult endeavor so if you are thinking about getting involved, you better come very well prepared. Be prepared to lose money because according to most statistics, 95% of beginning forex traders lost money trading the currency markets.
So with the odds stacked so high against us, should we even consider getting into this $4 trillion a day speculative marketplace? My short answer is "Yes" but you should only begin with a very small account. $250 or $500 is more than enough to start with.
You may also use a demo account for the purpose of learning that specific trading platform and trying out any new trading strategy or method you may be interested in. If you can not make money with a demo account, you probably can not make money with a real account. Does this make sense to you?
My best advice is to find a simple forex trading system. Locate one you can easily understand and agree with. Just because another trader makes money with a trade setup, does not mean you will. It has to make sense to you.
Read and review any material which may come with the system. Find out which idea or concept the approach is built upon. Do you agree with this concept? If you do, proceed to try out the system. If you do not agree, keep looking for a different fx trading methodology.
I would start out risking $5 or $10 to make $10, $20 or even $30 with each trade. This higher Reward to Risk ratio allows you to be wrong on more trades and still have the chance to make money with forex trading. Do not be afraid to lose trades. A losing trade does not define you as a person or even as a trader. Losing trades are simply just part of this business. Look at them as an expense for doing business in the currency markets.
Let's examine an example of risking $10 to make $20 by placing 10 different trades. If we lose 6 trades, our total losses are $60. If we win the remaining 4 trades, our total gains are $80. Our net gains are $20 even though we only win 4 out of 10 or 40% of our forex trades.
See, your objective is to make money online trading forex. Your purpose is not to be right. Being right focus on the need to have a high % accuracy in winning trades. This creates the need for perfection. When traders come up short on these expectations, they let their emotions take over. Fear and Greed. This is when they begin to take foolish trades and lose most of their hard-earned money.
If you want to make profits, be patient. Understand your trading system and write down your trading rules. Write down you want to risk $10 to make $20 and place 3 trades per day if that is one of your rules. These rules will keep you in check and on your way to becoming a profitable forex trader.
So with the odds stacked so high against us, should we even consider getting into this $4 trillion a day speculative marketplace? My short answer is "Yes" but you should only begin with a very small account. $250 or $500 is more than enough to start with.
You may also use a demo account for the purpose of learning that specific trading platform and trying out any new trading strategy or method you may be interested in. If you can not make money with a demo account, you probably can not make money with a real account. Does this make sense to you?
My best advice is to find a simple forex trading system. Locate one you can easily understand and agree with. Just because another trader makes money with a trade setup, does not mean you will. It has to make sense to you.
Read and review any material which may come with the system. Find out which idea or concept the approach is built upon. Do you agree with this concept? If you do, proceed to try out the system. If you do not agree, keep looking for a different fx trading methodology.
I would start out risking $5 or $10 to make $10, $20 or even $30 with each trade. This higher Reward to Risk ratio allows you to be wrong on more trades and still have the chance to make money with forex trading. Do not be afraid to lose trades. A losing trade does not define you as a person or even as a trader. Losing trades are simply just part of this business. Look at them as an expense for doing business in the currency markets.
Let's examine an example of risking $10 to make $20 by placing 10 different trades. If we lose 6 trades, our total losses are $60. If we win the remaining 4 trades, our total gains are $80. Our net gains are $20 even though we only win 4 out of 10 or 40% of our forex trades.
See, your objective is to make money online trading forex. Your purpose is not to be right. Being right focus on the need to have a high % accuracy in winning trades. This creates the need for perfection. When traders come up short on these expectations, they let their emotions take over. Fear and Greed. This is when they begin to take foolish trades and lose most of their hard-earned money.
If you want to make profits, be patient. Understand your trading system and write down your trading rules. Write down you want to risk $10 to make $20 and place 3 trades per day if that is one of your rules. These rules will keep you in check and on your way to becoming a profitable forex trader.
Tom Grennell is an avid forex trader and enthusiast. He shares his passion for this industry via his detailed writings and recommendations. His favorite Renko Charts for Forex can be investigated further at Forex Renko Charts
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