Trading forex is a relatively new asset class for the general public and has only really become possible for most of us since the late 90's when many of us started getting the internet connected at home. Before that, forex was the domain of the institution and if you were a forex trader it pretty much meant you traded stocks over the phone with your broker. The bad news for many newbie traders is that just because they can, doesn't mean they should and unfortunately many find that out the hard way. They start trading with no education or experience and lose their cash - quick! These failed traders spread the word that "all traders lose money" and that "trading doesn't work". Just because it didn't work for them, obviously it doesn't work for anyone else right?
The reality of the matter is that trading is like any other skill, it takes practice, discipline, experience and work! And many people do succeed. Just like I don't expect to grab a golf club for the first time and play on the PGA tour nor pick up a scalpel and perform open heart surgery, new traders should not expect to open a trading account and start trading well from the outset.
Intermediate brokers usually have numerous trading accounts with different conditions and spreads they could range from 0.5 to 3 and higher depending on your deposit, currency pair and other trading conditions. For exotic pairs they could be as high as 50 pips. The floating spreads offered a alternative to the fixed spreads depend on the market conditions. Generally, if the market is busy and a lot of forex trading is taking place, then you can enjoy a spread towards the lower range. On the other hand, if the market is low, then you will be given a higher rate. Many brokers use several liquidity providers and select the one that offer a better conditions which makes it possible to make the lowest spread possible and still provide profits for the forex broker. This is the cost of doing business however and it is not the most important variable in the forex trading.
So, how do you get rich off the forex trading and how make it quick? Is it possible to accomplish it at all? Is it just one huge scam the way DiCaprio shows it “The Wolf of Wall Street”?
Well, the difference between the stocks and forex is that you buy the same pair the big banks buy, nobody scams you into buying something that will not work. All you have to do it to buy or sell in the right time. Is that hard to learn? Well, you want to get rich quick then you might as well go to Las Vegas and blow your money there. It's more fun, you will get free drinks and the more you spend, the more the casino will look after you. The chances of getting rich quick by gambling in Vegas are of course very slim but at least you can have a good time while you get broke quickly.
So what are my chances ? If takes 10-15 years to became a good trader it is not for me! I can afford that much time!
Do not worry. In many cases one year or even six month (for natural traders) is enough to start getting real profits. However, there are some rules you have to follow and you must be very consistent with that.
Ok then. If I become a part time trader how much money can I get? Is 10-15% annually a reasonable profit? Isn’t it boring to have that 10% a year and waste my time, nerve and sleep?
Not at all. First of all, taking seriously trading can be a lot of fun. Second, there are many traders having their accounts increased by factor 10 in a year or two.
Ok. I am interested! What are my first and my second steps?
Easy. First, understand the principles of trading. Play a little with some imaginary trades on paper. Second, open a demo account. We recommend one of the brokers enlisted on our website but you can also do your own research and find a broker that fits your criteria. The demo account is free and does not require anything from you except your real name and e-mail. Start the demo trading! Practice regularly 3 -6 months. After that open a real (live account) and make your first steps in real trading. Trading real money will be very different psychologically. You may read articles on the psychology of trading presented on this website and in many other forums. Good luck and remember, forex is not just a hobby, it is journey and it may become the way of life and your new profession.
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