I am going to cut to the chase and tell you the truth about the Foreign Exchange (Forex).......you WILL fail unless you:
1 - Start with a healthy account ($5000 or more).
2 - Have a proven trading plan.
3 - Use disciplined money management.
Simple...yes? So, why do so many new traders blow their accounts?
New traders tend to start with a small account of $500 or less and try to develop their own trading plan. They study forex, create their own strategy and then spend days, weeks, even months paper trading their system. When they feel confident they trade live. They find that their gains are very small and so they don't use money management rules and soon after completely wipe their account. This process is time consuming, exhausting and very demoralising. But strangely, new traders will do it over and over.....and I should know, because I did it. It took me a while, but I eventually realised that it wasn't the system that was the problem...it was me.
But there is a way to turn that all around. Firstly, it is essential to have an account of at least $5000 before you start (the more the better). I know advertisers and brokers say you can start with far less but this is a receipe for disaster. If your account is too small, any progress you make using proper money management may feel insignificant - even though it isn't. As a result you may get impatient, and throw your money management rules out of the window. Then all it takes is a few bad trades to wipe your account. Learn more about money management and trading psychology follow the links on http://www.forexrobotsandsystems.com
Secondly get a proven commercially available robot or system. It is a little known fact that almost any robot or system can make you money if you use it with good money management. Robots and systems basically give you signals as to when you should enter or exit a trade (they can even trade automatically for you). They vary in cost, method and application. They come as pieces of software, ebooks or even memberships to online signal sources. The key is to find a robot or system that you are comfortable with, understand and enjoy. The website http://www.forexrobotsandsystems.com lists many of those available (in no particular order). I haven't personally used them all so I suspect that some of these products may be very similar. This is not a bad thing, just find the right one for you - at the right price for you. (Be wary of free products. They can help you learn but it is unlikely that the owner of a profitable system would make it available for free).
Lastly, practice good money management. Risking only a small amount on each trade enables you to survive when trades go bad. And they will go bad, it is all part and parcel of trading. No robot or system is right 100% of the time. So if you have a large account and use good money management your winning trades will be significant and your losses small. Search the web for more information on money management and see how essential this is for every successful Forex Trader.
Traders must also understand that Forex trading doesn't always suit everyone. Personality is a big factor. Impatience, greed and a lack of discipline is the main reason traders fail at Forex (not the system used). If you don't have the discipline maybe it is not for you.
But, if you do have the discipline, Forex could be a great way for you to make money. It's even possible to make it your full time job. But the truth is that you MUST follow the 3 steps or you will fail. So, Start with a healthy account, follow the instructions of your robot or system, use STRICT money management and you will be on your way to becoming a successful and wealthy Forex trader.
Happy trading!
Inga Maree
http://www.smartpayplanner.com
http://www.greatlifetoolkit.com
http://www.travelbooklibrary.com
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