The world of online forex trading has garnered a lot of attention from internet users of all ages. It is after all, a potentially lucrative business that has become accessible to the masses through the power of the internet.
However, the forex trading business is fraught with danger at every turn. It is a demanding industry that requires utmost attention to small details and quick action at all times of the day.
An accurate portrayal of the business is sometimes difficult to come across as the industry is full of businessmen looking to make a quick buck off unsuspecting beginners. And they do this by hyping up a variety of products to such an extent that beginners rarely have an accurate picture of what forex trading is really about.
Demo Accounts
Never rush to open a live trading account. Ideally, you’ll want to start trading on a demo account for at least a few months. This will help you get a feel for how the markets work in a longer time frame. Those that open a live account within the first week (or even month) of starting usually go on to lose all their equity. This is the primary reason why over 95% of beginners fail within the first few weeks of trading with real money.
Currency Pairs
While online forex brokers offer a variety of currency pairs as well as commodities such as gold and silver, beginners should always to stick to a single currency pair until they are fully familiar with it. A good currency pair to start of with would be the Eur/Usd, which is arguably the world’s most popular pair. It has decent daily range and is not considered very volatile.
Automated Trading Programs
If you are a beginner to forex trading, you would have come across a myriad of trading robots by now. The main problem with utilizing such programs is that the robots are only as good as the initial parameters you set them up with. As a beginner you are unlikely to have the experience or judgement to utilise the robot trading program effectively and hence can quite quickly lose all your capital.
Business vs Hobby
Many beginners treat online forex trading more as a hobby than an actual business. Such thinking will surely spell doom for their live accounts. Treat it as a business and you would be putting the right foot forward. Those that are unwilling to put in the necessary hours into this business are frankly better off at the poker tables at Vegas.
Forex Education
Any bit of money you spend on forex in the beginning should go to education, books and online courses. Not on a live account. You may also want a guiding hand in the form of a trading mentor as this will help speed up your education drastically.
By: Geoff Challis