Before You Trade Forex

Forex seems to be the rave of the moment. The incorporation of network marketing into forex training business means forex trading is being presented to more people than ever before. Technology has democratized forex, hence with a small deposit, anyone can take their own share of the over $5.6Trillion and growing market. All you need do is learn a few tricks and use trade signals sent by experts and you are in business. Anybody can do it. Even housewives are making more money than some professional traders. What are you waiting for? Since you can make money by recruiting or referring others, many who have not much idea what they are talking about are busy recruiting others to earn commissions. The focus has shifted from learning to becoming successful traders to earning a fat residual income through recruiting others. Some so recruited lose money, get frustrated and give up. You have a situation whereby many drop out while new recruits take their place, like a revolving door. Many are trying to achieve in weeks what takes months and years to achieve. Some disgruntled recruits have labelled forex trading a scam or gambling. While it is very true that ordinary people are making a lot of money in forex, there is a price to pay. There is no shortcut to sustainable success. If you don't know what you are doing, you are a gambler, pure and simple. Even in a situation where you get trade signals from experts, you need to do your own validation before entering a trade rather than follow blindly. The experts are not infallible. Trading forex is definitely not for everyone. Technically, anyone can do it, even 9-year-olds. The reality is that few will actually pay the price necessary to succeed on a sustainable basis. It is like becoming rich. Everybody can be rich but only a few will. It is the work required that separates everyone to let through the few who will. Forex is not a get rich quick scheme. It is not the latest investment in town. It dates back to the days of trade by barter. The fact that you are just getting to know about it does not mean it is a new investment scheme. Forex trading has been on before you were born and will be long after you are gone. You are hearing about it because the barrier has been lowered by technology. The amount needed to trade hitherto was beyond the reach of the poor and middle class. Now you can trade with a little amount of money from your phone using a broker half a world away. This book is not about how to trade forex. There are tons of books on that subject written by competent professional traders. Having traded forex for more than 6 months, I have a thing or two to share with those who may be considering trading forex or have been trading for a couple of months. The potential high rate of returns in forex trading can play to your greed, making you forget the fact that leverage is a two-edged sword. The money you put down to trade forex is just a deposit. The actual amount you put in the market comes from a financial institution offering you a margin loan via your broker. You are actually borrowing to trade. That is why you can make so much money with a small account balance. It is the same reason why you can also lose it all if you don't protect yourself through proper risk management. You can make money in forex; lots of it. However, it will not happen overnight. You have to invest in learning how it works and how to become a good trader. You will need to read a lot of books, listen to tapes, watch videos etc. to gain competence. Beyond competence, you need to have a solid risk management plan in place and develop self-control to rein in fear and greed. If a proper risk management plan and required emotional intelligence are not in place, you can lose all the money you made. The market gives, the market takes. So you want to trade forex? You need to do your own due diligence first. This book will help point you in the right direction