With the popularity of Forex reaching all-time highs, one wonders if Forex trading is for everyone. I believe it is. See more on forextamil. But before opening an account with any one of the numerous online brokers, I’d like to tell you how I failed at my first attempts at Forex trading so you can learn from my experience.
Back in a few years time, I was introduced to Forex trading in a seminar, after consulting with a few ‘experts’, I decided to read up about Forex trading before opening an account. On one of the interactive sites that I Googled, one other ‘guest’ offered to send me an e-book that would introduce me to the world of Forex and teach me all I had to know in one easy session. That sounded inviting! So I took him up on his offer, read the book he sent and by the time I was finished I felt I could discuss Forex with anyone who would listen to me.
With all the knowledge I gleaned in 24 hours, I opened a live trading mini trading account and funded it with the minimum required amount of $500. Now the stage was set and soon I envisioned climbing the Eiffel Tower during my long dream of trip to Paris. I read CNBC, Bloomberg and a few other financial news sites religiously and started following Forex news on a daily basis.
To cut a long story short, I ended up losing the $500 within a matter of seconds. Where did I go wrong? How could I have lost all that money when I followed the rules to a tee? As I sat contemplating my mistakes, a banner floated by on my computer screen with an even better offer. “Leave your Forex trading to us.” Well, I thought to myself, maybe I can win back my money if someone else is making the trading decisions. So I quickly clicked on the offer. To my dismay (and good fortune), I was informed that a minimum of $3000 was required to open an account. Phew. I didn’t have that kind of money so that solution to my problem was out. I figured out later that I had been saved from losing an even greater amount than the first time.
I think I had learned my lesson. So I went back to the tutorials and forum I had read and as recommended. I selected a broker and opened a free Forex demo account with $10,000. Incredibly, it took me 4 months to learn how to trade with a consistent profit before I go “Live” again.
Forex for All?
So back to my original question: Is Forex trading for everyone? I still say yes but before opening an account, every trader should go through a learning process to fully understand what he is about to do and write up a trading plan. There are no short cuts in Forex trading and should you decide to sign on, you must first educate yourself. I ended up blown my first Live account and started learning Forex trading from zero. I then followed it up by opening another demo account to practice my techniques and gain experience as I went along. Once I built the confidence, I went Live again and trade with small capital to start with.
I highly recommend that anyone interested in Forex trading must teach himself thoroughly about Forex trading and foreign currency exchanges. Placing trades in a demo trade is an absolute must. There is really no other way to practice what you’ve learned. Some demo accounts can be used for up to six months and it is during this time that you can perfect your trading method and gain the confidence you need to move on to the real thing.