By Hector Milla
While not for the faint of heart, Forex trading is attracting people who believe it is an easy way to make money. Most of them have no previous trading experience. Do they have any chance of making money?
Just as someone with no dart throwing experience can walk up to the line and throw a bulls eye on their first throw, a beginner in Forex can hit the mark on their first trade. But, the likelihood that they can be consistent is not very good.
Trading the financial markets takes a lot of study on how to read charts and understand fundamentals. Money management skills must also be developed.
Reading charts requires an understanding of patterns, trends, support and resistance. There are also a lot of tools and indicators that need to be mastered. These would include moving averages, Bollinger Bands and Stochastics.
Most people fail quickly because of poor money management. If you risk too much, you will lose your account quickly. If you don't let profits run, you will not be able to recover your losses and go into a profit. Experts agree that you should never risk more than five to ten percent of your account on a trade and that you should always have the chance to make at least double what you are risking on that particular transaction.
One way for an inexperienced trader to start with Forex is through trading software. A good program can take all of the guess work out of the market. It operates on a set of conditions that if met triggers a transaction. This is not to say that every trade is a winner, but in the long run it is possible to win more times than you lose.
Another way to get started is to open a practice account. Most brokerages allow the use of an account that has a large amount of 'play' money in it. This affords beginners the opportunity to make practice trades without risking any of their own money.
Practice trading is a great way to get the feel for the Forex markets and learn about money management, reading charts and using the indicators. It is important to keep in mind that just because the practice account is large does not mean the trades should be. The account should be traded as realistically as it will be when real money is put into it.
Just as someone with no dart throwing experience can walk up to the line and throw a bulls eye on their first throw, a beginner in Forex can hit the mark on their first trade. But, the likelihood that they can be consistent is not very good.
Trading the financial markets takes a lot of study on how to read charts and understand fundamentals. Money management skills must also be developed.
Reading charts requires an understanding of patterns, trends, support and resistance. There are also a lot of tools and indicators that need to be mastered. These would include moving averages, Bollinger Bands and Stochastics.
Most people fail quickly because of poor money management. If you risk too much, you will lose your account quickly. If you don't let profits run, you will not be able to recover your losses and go into a profit. Experts agree that you should never risk more than five to ten percent of your account on a trade and that you should always have the chance to make at least double what you are risking on that particular transaction.
One way for an inexperienced trader to start with Forex is through trading software. A good program can take all of the guess work out of the market. It operates on a set of conditions that if met triggers a transaction. This is not to say that every trade is a winner, but in the long run it is possible to win more times than you lose.
Another way to get started is to open a practice account. Most brokerages allow the use of an account that has a large amount of 'play' money in it. This affords beginners the opportunity to make practice trades without risking any of their own money.
Practice trading is a great way to get the feel for the Forex markets and learn about money management, reading charts and using the indicators. It is important to keep in mind that just because the practice account is large does not mean the trades should be. The account should be traded as realistically as it will be when real money is put into it.
NOTE: By researching and comparing the best forex trading softwares and platforms in the market, you will determine the one that meets your very specific financial situation and experience level.
Hector Milla runs the Best Forex Trading website - where you can see his best rated forex trading platforms and robots. Visit for further information.
Article Source: http://EzineArticles.com/?expert=Hector_Milla Hector Milla runs the Best Forex Trading website - where you can see his best rated forex trading platforms and robots. Visit for further information.
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