Can You Make Money Trading Forex?
Many new or inexperienced traders want to know: Can you make money trading Forex? Let’s unpack the concept and find out together.
Fast Funds With Forex?
Anyone who was alive through the nineties will remember the era of “get rich quick” schemes. One after the next, they poured in over the radio, through email chains, and especially infomercials. The yuppie generation was in, and they wanted to make a lot of money really fast, and they were willing to take a lot of risks to do it! Remembering this era is why we don’t like to think of trading as a get-rich-quick scheme or a sure-fire monthly income. That said, trading can undoubtedly bring in extra money at a very low risk since you don’t need a large amount of capital to start. You can check out how brokers like Oanda function at forex trading, or you can go it alone and learn on the fly yourself. Let’s take a look at how one makes some extra money with forex trading.
An important thing to remember is that in forex trading, as with most endeavours, you’ll need a solid grounding in the fundamentals of how everything works before you can expect to start making any money at all. A great way to find out what you’re getting into is to watch some online tutorials or even take a course in the basics. Another thing to do from the outset is to remain realistic and manage your expectations of the process; nothing comes without some hard work and understanding of the processes within the industry. The difference between a trader who does well and a trader who fails spectacularly is pretty much the same as what separates successes and failures in any field. The ones who make it and make a little money in the process are the ones who try every strategy that they know of to achieve success.
Another good idea to get you firmly set up at the beginning of your forays into trading is to open a demo account instead of jumping into things too quickly with a real one. This account allows you to operate in “real world” situations without actually risking anything. It will enable you to practice how you’ll react when the stress comes rolling in, and you have to make quick decisions. This is the time to make your mistakes and learn from them! With literally nothing to lose, all a demo account can do is make you a better trader. You’ll be able to watch how the market moves, learn all the jargon that previously sounded like Greek to you, test out any theories you’ve developed, practice trading different currency pairs and try out other platforms.
So, How Do You Make Money?
As you’ve gathered by now, asking questions like “when will I make money” or “how much money will I make” are not a productive way to start out in trading. It is possible to make daily income trading forex, but you need to follow all the initial startup steps and take great care in how you execute trades. All the examples you see of traders who have done well in forex trading have put in years of hard work and made wise decisions about how they spend and invest their money. What it comes down to is your mindset! A good mindset and positive attitude will keep you trying and working hard. If you persevere and put in the effort, you will find a formula that works well for you.
Another component of being a successful trader is deciding what you want to achieve. You can’t get anywhere unless you have realistic goals! Let’s look at an example:
You could aim for a 10% annual return on your investment, aim for 4000 pounds profit per month or go for 100 pips every month. Whatever your goal, you should make it something achievable and easy to measure. Once you have your goal in mind, you should set about finding out how you’re best able to achieve it. See what resources you have available, how much time you have to spend trading etc. This might seem like a lot, so here are a few tips to be sure that you make your way through the process and get on the road to success:
- Develop a strategy. Whether you want to be a long-term investor or a forex scalper, know what you’re going to do and stick to it.
- Don’t demo for too long. The training wheels have to come off eventually! Don’t be afraid to move from a demo account to a real one when you’re ready.
- Set stop losses for every trade you make.
- Keep your emotions in check. Don’t trade when you’re overly angry or stressed, rather than trading and making a mess.
- Don’t be afraid of a loss. Everyone loses sometimes; it’s part of the game.
There are many elements to success and making money trading forex. Hopefully, the information we’ve shared brings everything into sharper focus for you.