......without a plan
If you trade forex, you will lose money. That is a fact. (Read on, I’ll get back to you on this!)
If you trade forex without education, you will lose money, get frustrated and write a blog on how trading forex is a scam. But did you do any research on trading or your broker?
You will also write that the markets are always agains you, that your broker took your trades out, but you forgot to write that you got a margin call, or you don’t even know what that is.
Or you join a forum and post about how you lost all you money when your trade went the wrong way on the midterm election-news or non-farm payrolls. But again you forget to tell ‘us’ about your trading without a stoploss.
I am a forex trader
To be honest: I am a forex trader and I’m not going to tell you forex is a scam.
It’s the largest financial market in the world and yes, you shouldn’t trade forex; without a plan!
But be realistic: is there anything you would/could/should do without a plan?
If you go for a run, and don’t ‘plan’ at least to go home a some point, you might end up at the other side of the world. Or if you start a business without a plan. You might end up with 6000 donuts to sell but you didn’t plan to rent a shop...
Why you shouldn't trade forex; without a plan
You need a plan to stick to. And that is what a lot of rookie traders forget. And that is why most traders fail.
Why trading forex is dangerous
Trading forex is, like any financial instrument, a risk. You may lose money and never invest any money you cannot afford to lose.
Most traders enter the forex market without education, without a plan (which comes from the lack of education), with too little money, most don’t do their research and expect to get rich in about a week.
And yes, you will lose money if you start trading with those preparations and expectations.
Why you need to trade forex based on education
The most important thing about trading forex is to get educated! Read my blogs for starters ;-)! And read books. You are handling a very delicate product and it is not realistic to do something that important (we are talking about a lot of money here!) without any education.
You will lose money
Did I tell you yet? You will always lose money, but the key is to preserve your capital and make more then you lose.
The fact is that you will always lose money because there is no one that can offer you a 100% win rate on your trades. If they do: congrats, you found a forex scam 😉
There is no such thing as a trader or trading-strategy that will give you a 100% win rate.
So mentally you will need to be prepared as well to ‘cover’ some losses. Losing is always part of your tradingplan!
Starting forex will a small amount of money
You can trade forex with a very small amount of money like 500$ but don’t expect to make 1000$ a month with that kind of investment.
To trade forex you need capital and say goodbye to it before you transfer it to your broker. And no, I’m not telling you to say goodbye to your money because your broker is about to take it from you, no, you need to say goodbye because it’s will help you prepare mentally for losses and wins that are about to come.
Do your research, forex trader!
Would you send your money to someone who just sent you and email (in poor English) and asks you to pay?
I hope not! And I hope that, if you doubt the email, you will do some research and find where it came from.
The same thing is up with brokers: google is your best friend! Find people that have written about your broker and make sure they weren’t paid to write nice things (sponsored content) on blogs for example.
And of course you can always find one or two bad things on the broker you selected because of the facts stated at the beginning of this blog. But research is key!
Get rich in a week/month trading forex
Who ever tells you, that their strategy for trading is going to get you rich or financially independent in a month or week, is lying to you. To get rich in a week please buy a lottery ticket and wait to see what happens.
Trading forex is for the longer term and it will take time to learn a skill and find your way.
So the conclusion of this all: trading is a skill to be mastered. Day by day.. trader!