You've been reading and hearing about forex, or foreign currency trading and the riches the hype promises. If you're looking to make a million dollars tonight in your sleep with no effort or risk, you've come to the wrong place. But if you make the commitment and put in the effort to do it right and learn about the business, you can be a successful trader.
Forex trading is not something to be taken lightly, this market is volatile and risky. It is estimated that 90-95% of traders lose their investments in this market, most of them due to a failure to prepare. You don't want to be one of them. You can be one the 5% of winners by doing your homework and getting well educated before you leap. Fortunately, there are tools available to help you do that.
Where do you start?
1. Choose a legitimate foreign exchange company. Forex scams are everywhere, in fact it's the biggest financial con going - phony companies with attractive, professional-looking websites and promises of high returns and low risk. Investigate carefully and don't fall victim to promises of instant, easy wealth and high-pressure sales tactics designed to part you quickly from your hard-earned cash.
There are many good, legitimate companies around. Take the time to find the right one for you. Find a reputable company that is well established that you know will still be there tomorrow. Make sure it handles the currencies you are interested in now and any others you may wish to trade in later.
2. Join a forex internet forum or two. Some of the best traders can be found on these forums so go where the seasoned traders are and listen. Ask for advice on brokers, trading systems, strategies and currencies. Find out from those who know what has worked and what hasn't. There is a vast resource of knowledge there for the asking and there is simply no substitute for experience.
3. Many trading firms allow "demo" accounts where you can play with fake money in actual market conditions. This is a terrific way to get your feet a little damp with no risk. This is a "must do" step to prepare you for the market as well as discover if foreign currency trading is right for you at all.
4. After you've spent time with your demo account and you feel ready to invest some money, start with a "mini" account that you can open with as little as $250 or less. This will minimize your risk while you continue to learn. Only risk money that you are prepared to lose.
5. There are many websites offering real-time foreign exchange news and other necessary information. You will need to follow the news on the current economies of the countries whose currencies you trade to help you predict if those currencies are likely to fall or gain. Follow the non-economic news as well since politics and social issues may also affect the value of a currency.
6. Research forex "robots", software that works with algorithms designed by professional traders to continuously monitor the market and act automatically. It allows experienced traders to increase their number of profitable campaigns to increase income tremendously. It is also ideal for trading beginners to quickly learn to trade effectively and make some profits early on, taking much of the fear out of trading.
Forex trading can be a very profitable way to make a living or generate extra income if you make that commitment to learn before you leap, invest in the tools you need and continue to learn as you mature as a trader.
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