In the last two months of 2011, I took on a personal adventure to take on a new Investment Tool – Forex Trading. I started out with a US$100 mini-account from the start and at the end of the two months stint, I ended with only $4 and decided that it should be the end of my Forex Trading journey till the date I mastered what’s necessary to really make the money work harder with this tool…
But meanwhile, if you do have intentions to take on this Investment Tool and you are also starting off like a Beginner… maybe I can personally share my experience and what you can expect (if you are going serious on this)…
Can You Make Money With Forex Trading
The answer is definitely yes! And if you are really experienced with it, you can make money during the Good Times and Bad Times regardless on the economic conditions – though this still play a part in influencing the movement of a particular currency.
Despite the fact that you can really make money with it, the other side (= losing money) will still apply to anybody if you are not careful and when you trade without any considerations.
And as compared to other investment tools like Investing with Stocks or Property, you can see Profits (and even) Losses in a matter of hours or even minutes (of which I have seen traders making a quick 100% profit gain in 2 minutes – and this is the effect of doing their homework and timing the market well).
What You Need To Take Note When You Are Trading As A Beginner (From My Point Of View)
1. Read The News And Understand The Market. In Forex Trading, understanding the news will help you to become a Better Trader. And if you can take a piece of news and decipher what it means to a particular currency, for e.g. the news you just hear is sort of negative for a particular currency and thus will people think that it’ more profitable to exchange that currency to hold onto others, etc. If you can relate this well, I believe you are off to a good start being a Forex Trader.
2. Educate Yourself First With Books Or Seminars On Various Fundamentals. If you are serious about this, it’s good to educate yourself well with books or seminars that teach you to understanding the basics of Forex Trading. If you are not a person that are into profound explanation from books, you should take time or heed recommendations from other Traders on what kind of books you can go for that will help you to understand better and faster.
Some of the good traders that I have came across seems to be good with Technical Analysis – the understand of Chart Patterns and such. From the Charts, they know when they can expect things like Resistance or Support, expectations of possible Rise or Drop and even know when to Take Profits or Take Loss.
3. Learn To Take Profits And Take Loss. Learn to set Goals on when to take Profits and take Loss. Personally I have learned this the hard way of not setting goals. Seeing the joy of profits has eventually ended up in a back-to-zero situation when I could have the chance of earning a cool 20% profit. Likewise for Taking Loss – if you can convince yourself to take loss and move on to other trades, you can save up on time of waiting for the trade to bounce back to profits (which may or may not ever happen).
4. Do Not Follow Tips Blindly. If you are active in your Trading Community, do learn of not following “hot” tips blindly. I followed my friend (who has been making over 100% gains for last few days) on a “hot” tip – with assurance included. Long story short… I ended up with a 70% loss because of my persistence of not letting go (please see Point #3). If you like to receive advice, don’t take it wholesale but rather ask or discuss why is that so, how is it interpreted and such…
5. Start Small When You Are A Beginner. Believe it or not, many Trading Platforms would like you to upgrade to their “Gold” account when you first join, even enticing you with bonuses and many other tips. My Suggestion is for you to start small and if you are really that good with Forex Trading, you can basically roll back your earnings (and do withdraw out some to reward yourself) and upgrade to a better account.
These are a few personal things that I feel that you should take note of if you are intending to go into Forex Trading as a Beginner. Do spend more efforts to understand about this investment tool before going into it. It can be addictive (a bit like gambling) because of the thrills of making money fast and such – so do practice a bit of self-control! Good luck!