Trading online forex can be a rewarding experience, both financially and to your lifestyle. Successful online forex traders essentially work for themselves – no more bosses or sitting in early morning traffic. It’s like running your own business. “But is trading online forex for me?” you’re asking. Let’s take a look by asking some important questions.
What is your current financial situation?
You need to take a long hard look at what your financial situation is. If you are up to your eyeballs in debt, then it would be advisable to resolve your debt situation first. Trading can take some time to perfect, so you don’t want to incur more debt. You should also have savings and when you start trading you should be using additional savings, money you can afford to lose, not your main nest egg. Trading is like any profession – it takes a long time to get good at it. And the difference with this profession is when you’re bad at it you lose your money. So it’s important to not only be debt free, you should have enough savings to get you through the training period.
How much spare time do you have?
The great thing about trading forex is you can pretty much do it at any time of the day – morning or night. This gives you, the budding forex trader, the wonderful benefit of flexibility. But you still need to be realistic about the time you can dedicate to forex trading. If you are working, an hour a day learning and/or trading would stand you well. If you want to be a full time trader, you should be putting in office hours (8 hours) every single day – this is your new job, you need to commit to be successful. Don’t worry though, when you get it right, you are set for life.
What is your stomach for risk?
Trading online forex does have a certain risk to it. Anyone who tells you different is lying. But people do beat the market every single day. And most successful traders are just like everybody else. That being said, you do need to really understand what the risks are. You could lose all the money you put into your trading account. Sometimes you have to take bigger risks for bigger payoffs. You need to understand what your sense of risk aversion is so you can properly trade. You need to know what exactly you are willing to risk for every trade and when you will exit a position if it goes against you. Start with smaller positions and keep raising them until you get stressed out. That’s where your risk should stop.
Have you studied forex?
Although there are plenty of traders who have jumped straight into trading and been successful, this does not work for everyone. It is advisable to spend some time doing research, on sites like CMC markets or Investopedia. Learn about the different ways to trade and learn about other traders and what they say you should look out for. Open a demo account too. Although demo accounts don’t really teach you much about trading, they do teach you the technicalities of how to trade. This is great as you won’t waste any real money on silly mistakes.
Is trading online forex for you?
You like to study, your finances are in excellent condition, you have some money in the bank, you have some free time and like a little risk too. Then trading may be just the profession for you. Like anything in life, putting your head down and working toward something in a disciplined way usually leads to success. Is trading online forex for you? It’s actually for anyone who is willing to try, anyone who wants to make their money work as hard as they have for it. Whether you’re just out of school, a mom, a dad, or evening in your retirement, the best time to start trading is right now. In a few years from now you’ll realise that you made the right choice and give yourself a pat on the back. Good luck, and happy trading.