Things to do before you start trading

Many people make the mistake of getting into forex trading head first without knowing what they are doing. This applies especially to young people. They hear about forex trading from one source or another, and next thing you know they have their goal set on becoming the next trader on the wall of fame. The mistake they make is that they start off by registering to a forex broker, make a deposit and start trading straight away. Patience is the key here. As I’m sure you are aware of there are risks involved in any form of trades, so why would you start taking those risks before you have acquired the skills to judge whether a trade is good or bad?

Online forex trading is not really something that you learn simply by doing it a lot. I mean, sure, some people might be able to learn that way, if they are especially talented, but it certainly not the quickest or most effective way of learning.

I always recommend new traders to start off by creating a demo account at a forex broker when they first sign up. The sweet thing about these accounts is that they let you trade risk free, as you are not investing any real money into any trades – you simply use “fun-money” that you can trade, and you will then get to see what your results would have been. Once you’ve created your demo account I would advise that you read up on a few guides that you can find online. At the very least you should at least learn the first keys to trading, and the basics of how the market works and what sort of happenings will affect it.

Once you’ve started trading with your demo account and you feel more and more comfortable doing so, it might be time to make your first deposit and start trading. A word of warning though: Even though you might have had loads of success on your demo account, don’t take for granted that the same type of success will happen straight away when you start trading for real money! The reason for this is of course the fact that there is no risk involved in the demo trading. Therefore you will not be emotionally involved in your trades, and you decision making will therefore not be affected by your emotional investment. When you start trading for real money, you will probably notice quite quickly how things just turn more “real” very quickly!

Another tip I want to give new traders is to start small! It’s much better to start of by trading with money that you can comfortably afford to lose, rather than putting all your savings into your account straight away! You can read a lot more about forex trading and how it works on!

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