Can You Really Make Money Trading Currencies? Yes! Here goes…
Many people have heard about the opportunities that exist in forex trading but are hesitant to take the plunge and get into the forex business. One of the major obstacles is that many people who are wondering if one can really make money trading forex are surrounded by more failures than successes. For some, forex fortunes have become an elusive reality while fact remains that those that take time to master the game are raking in the benefits of this trillion dollar industry. Are you intending to go into forex trading? If you are, trust that you can achieve your set goals as long as you do not align yourself to be next failed statistic by ignoring these crucial principles.
These principles will help you make money trading forex
Forex Trading is not Easy and Takes Time to Master
Unlike many brokers that are paddling various brokerage platforms and services want you to believe, it takes time to master the ins and outs of forex trading. Many new comers into the forex fray take the plunge thinking that trading forex is another form of gambling. Forex is a real deal but fact is that you need to be willing to invest your good time and efforts well as money to get a good grasp of how to trade meaningfully.
Many brokers are not going to tell you this fact because they just want you to part with your hard earned money and buy whatever trading software or brokerage services they are selling to earn their commissions.
Here is a broker pitching a “powerful” forex trading product or service that has a potential of making thousands of dollars for you in a day as they claim. Ask yourself this question, if forex trading was so easy why doesn’t this person focus his efforts on using this powerful forex trading product and earn easy forex money than expend his energies earning the meager commissions by trying to convince people to buy the trading product. This does not imply that forex trading is rocket science or that trading products are all worthless. NO! The point is; mastering forex takes a lot more that what many forex trading systems evangelists wound want you to know.
Forex Trading is as Easy Purchasing Any Popular Trading System. Wrong!
Many newbies take a dive into the murky waters of forex trading assuming that this endeavor is as simple as laying your hands on any trading system. This is where many beginners get it wrong. If you use forex trading forums as your sole research turf for identifying good forex trading systems then you are vulnerable to falling for the half-baked forex trading products that may enjoy transient success at best or that are totally useless at worst.
There are many forex trading systems that are built on market indices. These market indicators based systems quickly outlive their relevance when the forex market experiences significant shifts in trends or direction. There is a coterie of indicator based trading systems that easily get popular. Most of these systems render great signals in trading markets yet they fail badly in ranging markets. Fact is that most indicator based systems are not tailored to adapt to ever changing market conditions and this is a huge problem.
A trading system that works this month may not necessarily work next month. The best forex trading systems are those that have been forward tested for over a year. With such a system you know that as a trader you are working with a formidable product that will help you achieve your forex trading goals over a long term.
Here is What You Should Know
Abandon your search for the perfect forex trading system, this is a wrong approach. Rather, focus on mastering the basics of online forex trading such as how to read price action as well as how to place support and resistance areas. If you can grasp these two aspects the need for sole reliance on trading systems will be positively diminished.
Demo Trading Accounts Will Not Equip You Fully For Live Trading
Here is a fact that many brokerages will not tell you. First off, there is no gain saying the immense value of innovation that enables traders to get familiar with forex trading in a simulated environment. Nonetheless, demo trading does not prepare traders for the real time trading environment. Besides familiarizing beginner traders with the technical aspects of the trading systems, demo trading is totally devoid of the psychological influences that have a huge impact on real trading performance. Decisions taken in demo trading are not necessarily reflective of the kind of decisions that can be taken in real time trading where real money and real risk are key factors. Statistics have showed that many beginners in the forex fray do very well in demo trading but most of these fail to transpose their demo trading feats into real time trading. Demo trading has its good place in preparing beginners on the technical aspect of things but do not expect that demo trading will make you a firebrand forex trader.
Mastering Forex Trading Takes Time
This may sound discouraging but you are better off hearing this now that learning it the hard way after you have lost your money and time. Many trading systems sales personnel and brokers will tell you that once you sign up you will not have to spend much time in trading as you can rake in good profits by committing a few hours each week. Fact of the matter is that you need to invest a great deal of time towards mastering forex trading. It may not be a full time endeavor necessarily but you need to invest several hours in a week in order to master forex trading especially when you are starting out. What you will find encouraging though is that once you learn to do it profitably, you can strategize on it and cut down your trading thrust to about two hours per day and around four days a week.
Adaptability is Key
The last principle should not be regarded as minor at all. Besides short term volatilities the forex market is ever changing even on a long term trajectory. As a trader you need to adapt and learn to play to the trends right on the fly otherwise you will never cut it. Part of this trait is the ability to make quick decisions in face of what the volatile markets may be throwing at you. Making quick decisions is one thing, making good (profitable) quick decisions is another! This is what separates winners from losers in the forex game. As a trader you need the ability to adapt from trading breakouts for instance to trading methods that are based on price action for example, if need be. This will not only keep you afloat but will ensure that you have a set of skills and approaches that are always relevant to the wild beast of forex.
Are you interested in starting your journey in forex trading and learning good basics that will give you a grip, look at this resource Forex Trading Guide For Beginners
The forex education series by Forex4noobs.com is another great resource to explore.
Brokerages present traders with currency trading platform which comes with unlimited opportunities.
Identifying the Best Currency Trading Platform
Forex trading as well as currency trading software have already been defined and explored in our previous forex trading guide articles. Determining the best currency trading platform cannot be as simplistic as naming this or that trading platform as the best. The best way to approach the subject is to explore and outline some aspects that define a good currency trading platform.
Features of the Best Currency Trading Platform
So now you have grasped some key concepts about forex trading and you want to jump to the gravy train of automated trading. The following guidelines will help you to identify the best currency trading platform dependent on your personal preferences and goals.
Most traders prefer online currency trading platform to offline desktop trading platforms. In the spectrum of online trading applications traders need to ensure that they start off with the right software. All forex software are touted by their marketers and inventors as the best and they all present remarkable online trading features. So, what is the difference?
Answering the foregoing question becomes easy when you have a clear understanding of your needs and skills level. The best forex software is the one which you can use and navigate around meaningfully and can use to the best of your forex trading abilities. If you cannot grasp how a particular software works then you are not likely to cut it with your forex trading endeavor.
As you assess different forex trading applications you must zero in on these aspects:
Can the software help you grasp how interest rates are applied when they are part of an equation?
Can the application give you the overview of economies involved, international, national and local?
Can the software help you understand the concept of foreign exchange as well as global trading.
If the software can help you through these aspects then you are looking at a considerable forex trading software.
When it comes to IT, security is always a major factor.
This is definitely one of the major areas to look at when one is considering the best currency trading platforms. While you may not have to be a geek or IT guru the major aspect to check here is encryption. As a thumb rule, consider currency trading applications which come with a 128 bit SSL encryption. This encryption safeguards your crucial and critical information against hackers.
The last aspect on choosing the best currency trading software is the aspect of customer support. Forex trading is intricate business; you need a helping hand and guidance through the thrills and spills of your trading. Customer service must be prompt in answering your questions and responding to your live chat requests.
One of the most important aspects to check is whether or not the application comes with a demo account for users. This facility is very important because this is where you can learn the ropes of forex trading. A demo account enables you to load demo money and learn how to trade. This ensures that you learn how to trade before you can take risks with your actual cash and the facility thus helps diminish the risk associated with forex trading.
As an online trader it is important to join an online trading forum so that you can get help from experts and like-focused traders. The innovations in IT have enabled the establishment of Electronic Communications Network (ECNs) on which inventive software have been built to enable traders to even conduct after hours trading.
Currency Trading Software Present Unlimited Opportunities for Traders
Cyber innovation comes with a formidable amour of currency trading software for out-and-out traders.
Currency trading software is used to refer computer applications that provide facilities for trading financial products, namely, currencies and stocks. The kind of software is developed and provided by brokerage firms towards enabling forex clients to trade financial products and handle their own trading activity. Key to note here is that different firms have different currency trading software which come with different interfaces for trading activity and data mining. Some trading applications are provided for free by brokerage firms while some software can be brought from third parties to complement the trading platform provided by brokerage firms.
The past decade has seen a proliferation of currency trading software thanks to growth of electronic communication networks (ECNs). ECNs have become the standard alternatives to the conventional stock bourses and exchanges.
The advantage of cyber forex trading that takes place in ECN powered platforms is that transaction costs are significantly low and this enables many traders to enjoy various full-service and discount brokerages. This is done as a way of providing trading software to the clients at very cost-effective rates.
A currency trading platform provides charts, quotes together with an interface wherein traders can enter orders that should be executed by the broker. Some trading applications are accessible online while some must be downloaded and installed on the trader’s computer. Web based trading platforms are favorable given that they can be accessed from anywhere where there is a computer and internet access. Most of the trading platforms are built on the robust web programming language, Java.
Innovation especially in the cyber realms has opened up a myriad of possibilities. Before plunging into the deep end of actual forex trading traders can make the most of the demo trading platforms to learn the ropes of forex trading. In the demo platform traders can load demo money and practice forex trading. Once basic skills have been mastered traders can then dive into the actual trading platform and deal with real money.
Any standard forex trading application must have the capabilities of functioning as a go-between for the real trading forex broker and the trader. One of the important aspects to be considered in the choice of currency trading software is the aspect of reportage. A good application must present real-time data as well as historical data to the trader so that the trader has access to all types of orders. Trading platforms also offer different features depending on the nature of trade and the level of advancement that the brokers want to provide to the trader. Before a trader can settle for any trading software a comprehensive forex trading guide (link 2) must be explored in order to establish the best approach and hence the application that will best suit the trader’s objectives. Exploring reviews and asking question in a forex trading forum will also yield valuable insights from experienced traders who can help beginners to build their forex business.
Multiple Currencies Trading Accounts: Are they worth it?
Forex business gives traders many opportunities they can exploit towards achieving financial empowerment. Instead of running one trading account traders can have multiple trading accounts.
Forex, trading account, multiple trading accounts
In online forex business, innovation opens up a myriad of opportunities for traders. Instead of running one forex account traders have the liberty to open and manage multiple trading accounts. Opening multiple trading accounts works best if the trader fully understands what they are doing. The approach is a great way that traders can exploit to check out the service of different forex brokers in depth and identify what they want. It is very difficult to know how good or bad the services of different trading companies are if one has not used their services.
Why should you open multiple trading accounts?
Running one stock option trading account for example, as a trader is convenient and empowers the trader to be an effective investor with laser focus on their trading account yet sometimes it is necessary to open multiple trading accounts. The paramount reason for opening multiple trading accounts is to assess the value of the services offered by different brokers and be in a position to identify the best forex brokerage services.
As you gain more experience as a trader your objectives and strategies may begin to evolve. At this point it will become clearer that one forex trading broker cannot satisfy all your forex trading objectives and this is when you need to open multiple trading accounts. One good example scenario is choosing to scalp the forex market on a forex system that offers low spreads while committing long term orders on a brokerage service that offers a better all-round service.
Forex traders must not make the mistake of blindly choosing any forex broker. At this phase, traders must not target particular brokers simply because they are offering cheap spreads. In other words, do not simply go for the brokerage with low spreads and minimum deposits. Remember that the main reason for opening multiple trading accounts is to assess the entire value of brokerage services. Some brokers may have cheap spreads but that does not mean they will score well on other critical aspects of forex brokerage such as customer service. It is understandable that in this phase you do not want to lose a lot of money but going for brokers with the lowest spared or those with lowest minimum deposits will not enable you to achieve the main objective of opening multiple trading accounts.
When you manage multiple trading accounts, the objective is to evaluate the overall services of forex brokerage. For many traders starting out, the question of which trading platform is the best is quite difficult to answer. Opening multiple trading accounts is one of the best ways of answering this important question.
It is not outright necessary to open multiple trading accounts but as a trader you are at liberty to consider doing so if you have your reasons and objectives intact. One of the best ways of getting a good foothold in forex trading is opening a multi terminal trading account. However, this is not exactly the same as opening multiple trading accounts with totally different brokers. If you are interested in exploring a multi terminal platform, MT4 Multi-Platform is one of the great places to start.