So you want to make money in currency trading and you have recently heard about FOREX. So, how do you become FOREX Rich?
Lets learn a little bit about FOREX first…
FOREX refers to a worldwide market where currencies are bought and sold and is the largest liquid financial market, with trading reaching upwards of 1.5 trillion per day.
Investing with FOREX has the potential to make you a ton of money. The risk can be big but the ability to conduct marginal trading means that profits can be huge compared to your initial investment. Another benefit of FOREX is it is so huge that it is almost impossible for others to gain by trying to influence the market.
FOREX trading isn’t simple and you must learn the basics in order to start investing. Once you start, the trading process is quite straightforward, but there are some risks involved. Learning about FOREX will help you to be profitable and is a good place for beginners to start.
To start an account you need to provide ID and fill out some forms. Part of the form will be what is called a margin agreement. This gives the broker the right to stop any trade it feels too high risk. Most of the money used for trading will actually belong to the broker, and they have to be able to protect their interests in the long term.
So how much will you deposit in your account? Well, some brokers allow you to have a small account of $250, while others insist upon a minimum of between $500 and $3000. The broker will also decide how much leverage you have. For example, one client may be able to control $80,000 with his initial investment of $1000, while another might only be able to have control of $50,000. The higher your leverage is, the more cash you have for trading. Make sure you are careful to begin with as it’s never a good idea to start by putting all your money into the market in the first trade. It’s important to practice by what is called paper trading. This means pretending to make investments without actually processing them on the live system. This is a great way of dipping your toes in the water without getting bitten. If you find you are making losses paper trading, its time to rethink your strategy. If you find you are making money then its time to start using real money.
There is, unfortunately, no proven method to trading with FOREX. Some people claim to have found the ultimate forex system; however, through my experience it’s best to develop your own method while trading. Decide what time of the day you want to trade and set yourself goals. Some of the most experienced FOREX traders trade the London and New York overlap. The overlap occurs between the 9:30 am GMT and 2:00pm GMT. The reason they trade during this time is that the market fluctuates and can become volatile.
If you want to be successful with FOREX you must learn to block your emotions and control your anxiety. A true FOREX trader has discipline, regardless of what happens in the markets. Take your time and really learn how the FOREX market works then once you are truly comfortable you can become… FOREX rich.