I am trading in the Forex market for more than 1 year and maybe my experience can help many people to trade. I must tell you that it´s not an easy way. You are looking for a new way to gain some extra money (forget to make you a millionaire trading Forex) and you have always read that this is the biggest financial market in the world and you can gain that money working at home once you have learnt how to trade.
Yes, it´s great!, but as I told you before it´s not an easy way. Firstly you begin reading a lot about forex in many websites, as for example babypips, to understand the basics to trade in this market, it takes some time and effort, maybe forex is not for you. You are surprised with all the indicators and strategies that many people use, and it seems that everybody is gaining money applying them (don´t believe them, most of them will never tell you that they are losing money).
Once you have learnt all that you think you need about forex you begin to trade in a demo account (someone told you: first trade in a demo account, don´t risk your money: good advise). You are surprised!, you made more than 20% in 1 month!, how easy is to trade Forex!. Many people has experienced the beginner luck.
Some months later and after learning more and more you have decided to trade with real money, you are going to gain a lot of money
You learnt a lot about indicators, financial news, strategies and you begin testing one of these strategies in your real account (have you ever heard about money management?).
Maybe the first month you gain some good money (he he Forex is easy! I am a good trader! those traders out there only gaining 5% monthly don´t know what they do!), but in a short time you have lost all your money (ouch…).How is it possible?, I was gaining a lot in my demo account during some months and also in my first month with a real account…
Yes, you need to lose money to gain experience and humility, if you don´t learn from your mistakes you will not trade with success later. And the market is not always the same, those nice strategies work very well during some months and others not.
Some months later you have lost some good money and you don´t know how to trade, you even change your strategies from time to time and always losing (Forex is not as easy as I thought…). You discover that all you have learnt seems worthless. Many people even say goodbye and never trade again when they reach this level. Other people continue with his will and illusions, they want to be good traders!, they don´t surrender and they discover how important was a good money management (if I would have known about it before…).
Now you are trading again in a demo account but this time with a good money management and with few indicators (trend lines, channels…), as simple as possible. You gain more and more experience: patience, discipline, almost an intuition that tells you when and how to trade. You are gaining more and more confidence and your trades are doing very well. Here you are beginning to trade in a right way.
Now you know that you should only risk 1% or 2% of your entire funds in your opened trades. Now you understand that Forex is not as you thought and you understand those traders gaining a lower but safer profit every month.
Do you feel identified with this experience?.
Your comments are welcome.