I won’t say this in a pleasant way for fear you will miss the point, so here it goes: “Learn forex trading before you begin actual trading or expect to lose your entire investment. You wouldn’t attempt to take a car out onto the freeway before you had learned to drive and you wouldn’t try to swim across a lake before you learned how to swim. So, why would you even think about throwing away your hard-earned money trying to trade the foreign exchange markets if you had absolutely no sense of what you were doing? Make sense?
So, what’s a better choice? In fact, there are a number of them but they all center on practice. As in learning to ride a bike or dance, you learn from your mistakes: When you know what doesn’t work, you can find out what does work by a process of elimination. In the world of forex there are simulations, games, software and “practice” accounts to help you get your feet wet without any chance of drowning. Basically, what you are attempting to learn is how the various currencies are different from each other and how they trade against each other.
Most of the trading on the forex markets is done by banks, financial firms, brokers and individuals. Banks have been doing this since the 1970’s and they pretty much know what they are doing. Individuals, looking to make a quick dollar, on the other hand, may THINK they know what they are doing but in fact they haven’t the foggiest notion of how to place and then exit from a lucrative currency trade. Their egos won’t let them stop until a catastrophic loss slaps them right in the face.
If you’d prefer to take the wiser route of a levelheaded and willing student, the first thing you must do is locate a trading software and teaching program that can provide you with the edge you’ll need over other traders. There are lots of computerized gaming programs to assist you with this sort of thing. You will also want to open a free “practice” account with a dependable forex broker. You will then want to do some research on current world events and read the news concerning forex trading conditions right now.
Once you believe you have a handle on things, you can commence placing phony trades with phony money in a real marketplace. By keeping precise records, you can begin to find out what worked out and what didn’t work and learn from that. When your track record starts to appear promising you can then start to commit genuine money to real trades. Before you can initiate this, however, you will need to find a trustworthy forex broker to do business with. Here, you should be VERY watchful. The Internet is full of phony brokerage companies and fake brokers. Ask for references from experienced traders. Don’t be gullible.
Finally, be sure you know the laws that apply to you and to forex brokers. Only some brokers are certified to do business with individual traders. The woods are full of wolves. Protect yourself by being informed and by keeping your eyes open. Good luck on what can be a very lucrative venture!
© 2011 Robert M. Gillespie, Jr.