Forex Trading: Can You Really Make Money Trading Forex?
The notion of trading foreign exchange (Forex) currencies may sound like a fairy tale. Is it really possible to make money with Forex trading?
If Forex prices stayed fixed then you’d expect there to be a clear win/lose for every currency deal made. But that is a far too simplistic view. Sure, if I was selling you actual cash dollars in exchange for dollar notes, there’d likely be a no-win situation. Of course, if I was dumb enough to sell you $100 for $99 then I’d lose a dollar and you’d win one.
Forex trading is no way near as easy to understand as that example though.
The exchange rate between any two currencies is a moving target. Take a glance at the Forex currency graphs and take a note of the amount they move in as little as an hour. Then remember that whilst dealing Forex can be simply selling US Dollars to buy Canadian dollars. I could change my dollars into euros first, if the mood took me. Of maybe it would make sense that two (or three or more) currency exchanges would benefit me more than just a single trade. Even after the fees involved.
If you’re just starting Forex trading, it will pay you to go through at least one of the online Forex courses available.
Then dip your toe in the water by placing some money in a Forex trading account.
For the most part, demo accounts aren’t worth your time. You’ll learn faster with real money. It’s just not the same. You won’t make the same decisions if it’s not really your money. Feel free to open a demo Forex account and check this for yourself. But pay attention to your stomach when you make a trade. If your stomach doesn’t churn when you stand to lose your make-believe dollars (and chances are that it won’t) then you need to decide whether or not you’d react the same with actual hard cash. My bet is that you won’t trade real cash anywhere near the same way.
Which means your first foray into Forex trading should be with real cash. As with any form of gambling (and Forex counts as gambling, at least to start with), make sure it’s cash you don’t care if you lose. But cash nonetheless.
Next up, unless you want to be glued to your computer screen 24 hours a day, get some Forex software to help you. At its most basic, you want a software program that will take note of your win and lose limits and will end the trade at one of those points. A “stop loss” is set when you place a trade to make sure that you don’t lose all your cash if the trade goes against you. And it’s good practice to quit a trade when you’re ahead.
Find out more about automatically trading Forex here.
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