By Alan Bentler
If you want to trade Forex successfully you have two possible ways of accomplishing this: learn how to do it yourself or have somebody do it for you.
Learning how to make money trading Forex
This approach has the advantage of you being in control and actually knowing what you're doing. The disadvantage of this approach is that you have to be involved and spend some time and money to learn how to trade successfully. To be prepared for live trading currencies you will need at least 3 months of training and 3-9 months of demo and micro- or mini-account trading before you can start trading live with your money. You can start learning the basics using some free resources that you can find on the net, e.g. at babypips.com or the Forex Factory websites but if you want to trade Forex successfully, eventually you will need to take a course on Forex trading.
Some may think that this is too much work and too much effort, but when you think about it 8 or 12 months is a very short period of time, when compared to how long it takes and how much money you spend on your education in many other occupations. Take a look at the following table, which lists some of the more "prestigious" and higher-paying jobs and compares them to your Forex day trader "job":
Occupation Avg. earnings year 1 Avg. earnings year 5 Training cost Training Duration
Doctor $110,000 $140,000 $300,000 16 years (4 yrs college, 4 yrs med school, 8 years residency)
Lawyer $50,000 $80,000 $160,000 7 years (4 yrs college, 4 yrs law school)
Programmer $35,000 $65,000 $130,000 6 years (4 yrs undergrad, 4 yrs optional post-grad)
Now let us compare these figures with what a Forex trader can earn a year and how long it takes to become one...
Assuming you will spend 1 year on your training and demo and mini-account trading before you start trading live standard accounts and that your initial deposit will be $10,000, your education costs are as follows:
$500 - spent on Online Forex Courses
$200 - Trading Software (if you want to use automation, otherwise $0)
$200 - Books or financial magazines subscription
$500 - 1 "blown" mini account. In other words we are assuming that you will start your trading on a mini, with a deposit of $500 and will completely destroy this account during your training (which in fact is virtually impossible, because even in the worst case scenario, where you open bad trades one after another you will still get back the margin portion of your account). At any rate - consider this $500 dollar account part of your tuition, the price of learning a new skill and don't cry over it. When you learn how to trade Forex successfully you will be making this kind of money in one afternoon! :-)
$100 - Misc. expenses - money spent on magazine subscriptions, e-Books, etc.
------
$1500
The above assumptions are more than realistic. As a matter of fact it is quite possible that you will be able to complete your training phase way earlier and that you will spend, say, $300 on online Forex courses instead of $500, and that you will not lose your $500 mini- or micro-account but will successfully make $50 or $100 dollars in profits with it! However, I'd rather you assume the worst and be pleasantly surprised than the other way around!
For an in-depth comparison of some of the most popular online Forex courses and education take a look here: http://www.fxsoftwaresolutions.com/ez-forex-online-course-comparison-vs-offline.
Have someone (or "something"?) trade for you
Don't want to go to online Forex courses and wait a whole year before you start earning money? Well... that is doable! You drive your car every day without knowing how every part inside of it works, correct? Yep. And this does not make you a worse driver driver than your mechanic. Similarly you don't need to know the Forex market inside out to profit from it!
There are companies offering signals which will tell you exactly when to enter an order and when to close it. There is software which can do the same -- or even more! - trade 100% automatically for you! If you want to benefit from the investment opportunities of the currency markets but prefer a more hands-off approachm then signing up with a signal-provider company or opening a managed account or buying a Forex trading robot may be the best solution for you.
Doubtful about automated Forex software? If you think that automating your trading is just a gimmick or that forex robots and signals are nothing more than a scam - think again!
Did you know that since 2006, MetaQuotes Corp (the creators of the MetaTrader Forex trading platform), holds an annual Automated Trading Championship, where Forex robots compete over the period of 2 months for the prize pool totaling $40,000 in cash?! Participation is free, but you need to register in advance.
Last year (2008) the top ten finalists averaged a final balance of over $100,000 - that's over the course of 2 months and starting with a $10,000 initial balance! Which means that each of the robots could potentially increase 10x your money within 2 months!
This is no hoax, no scam, no fad - the ATC is an international event, documented, regulated and sponsored by several renowned Forex industry giants. The prizes are provided by the sponsors: FXCM, FXDD, IBFX and others and the winners are determined by a MetaQuotes jury according to the strict rules of the tournament.
Learning how to make money trading Forex
This approach has the advantage of you being in control and actually knowing what you're doing. The disadvantage of this approach is that you have to be involved and spend some time and money to learn how to trade successfully. To be prepared for live trading currencies you will need at least 3 months of training and 3-9 months of demo and micro- or mini-account trading before you can start trading live with your money. You can start learning the basics using some free resources that you can find on the net, e.g. at babypips.com or the Forex Factory websites but if you want to trade Forex successfully, eventually you will need to take a course on Forex trading.
Some may think that this is too much work and too much effort, but when you think about it 8 or 12 months is a very short period of time, when compared to how long it takes and how much money you spend on your education in many other occupations. Take a look at the following table, which lists some of the more "prestigious" and higher-paying jobs and compares them to your Forex day trader "job":
Occupation Avg. earnings year 1 Avg. earnings year 5 Training cost Training Duration
Doctor $110,000 $140,000 $300,000 16 years (4 yrs college, 4 yrs med school, 8 years residency)
Lawyer $50,000 $80,000 $160,000 7 years (4 yrs college, 4 yrs law school)
Programmer $35,000 $65,000 $130,000 6 years (4 yrs undergrad, 4 yrs optional post-grad)
Now let us compare these figures with what a Forex trader can earn a year and how long it takes to become one...
Assuming you will spend 1 year on your training and demo and mini-account trading before you start trading live standard accounts and that your initial deposit will be $10,000, your education costs are as follows:
$500 - spent on Online Forex Courses
$200 - Trading Software (if you want to use automation, otherwise $0)
$200 - Books or financial magazines subscription
$500 - 1 "blown" mini account. In other words we are assuming that you will start your trading on a mini, with a deposit of $500 and will completely destroy this account during your training (which in fact is virtually impossible, because even in the worst case scenario, where you open bad trades one after another you will still get back the margin portion of your account). At any rate - consider this $500 dollar account part of your tuition, the price of learning a new skill and don't cry over it. When you learn how to trade Forex successfully you will be making this kind of money in one afternoon! :-)
$100 - Misc. expenses - money spent on magazine subscriptions, e-Books, etc.
------
$1500
The above assumptions are more than realistic. As a matter of fact it is quite possible that you will be able to complete your training phase way earlier and that you will spend, say, $300 on online Forex courses instead of $500, and that you will not lose your $500 mini- or micro-account but will successfully make $50 or $100 dollars in profits with it! However, I'd rather you assume the worst and be pleasantly surprised than the other way around!
For an in-depth comparison of some of the most popular online Forex courses and education take a look here: http://www.fxsoftwaresolutions.com/ez-forex-online-course-comparison-vs-offline.
Have someone (or "something"?) trade for you
Don't want to go to online Forex courses and wait a whole year before you start earning money? Well... that is doable! You drive your car every day without knowing how every part inside of it works, correct? Yep. And this does not make you a worse driver driver than your mechanic. Similarly you don't need to know the Forex market inside out to profit from it!
There are companies offering signals which will tell you exactly when to enter an order and when to close it. There is software which can do the same -- or even more! - trade 100% automatically for you! If you want to benefit from the investment opportunities of the currency markets but prefer a more hands-off approachm then signing up with a signal-provider company or opening a managed account or buying a Forex trading robot may be the best solution for you.
Doubtful about automated Forex software? If you think that automating your trading is just a gimmick or that forex robots and signals are nothing more than a scam - think again!
Did you know that since 2006, MetaQuotes Corp (the creators of the MetaTrader Forex trading platform), holds an annual Automated Trading Championship, where Forex robots compete over the period of 2 months for the prize pool totaling $40,000 in cash?! Participation is free, but you need to register in advance.
Last year (2008) the top ten finalists averaged a final balance of over $100,000 - that's over the course of 2 months and starting with a $10,000 initial balance! Which means that each of the robots could potentially increase 10x your money within 2 months!
This is no hoax, no scam, no fad - the ATC is an international event, documented, regulated and sponsored by several renowned Forex industry giants. The prizes are provided by the sponsors: FXCM, FXDD, IBFX and others and the winners are determined by a MetaQuotes jury according to the strict rules of the tournament.
If the above facts have swayed your opinion in favor of automated Forex trading you can get more details about the championship and the robots at http://www.fxsoftwaresolutions.com/articles/results-2008-automated-trading-championship
Happy (auto?) trading, Alan Bentler
--- Alan Bentler is a veteran trader and an editor at a Forex online community web-site.
Article Source: http://EzineArticles.com/?expert=Alan_Bentler Happy (auto?) trading, Alan Bentler
--- Alan Bentler is a veteran trader and an editor at a Forex online community web-site.
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