Forex trading has gotten mixed reviews lately. Can you make money with Forex? In this post we’ll review the essentials you need before trading online.
Forex trading is a popular method to earn some extra cash online, but it’s also risky and a lot of people lose more than they earn.
This leads people to ask the question, “Can you really make money with Forex?”.
I’ll do my best to answer that question in this article.
Before You Get Started with Forex:
Before you dive in, it’s important to understand Forex requires an initial investment. Most Forex trading companies will require a minimum deposit of a couple of hundred dollars, the amount varies from company to company.
And you will need to stay on the platform opening and closing trades in real-time to make the most of your investment.
Speaking of investments, have you considered using a legitimate online investment platform? Fidelity Investments is a decent investment platform that you can use to grow your investment portfolio.
In other words, it’s not as passive as some people suggest.
There are loads of fishy Forex products and bots that promise to open and close trades on your behalf, sending thousands of dollars to your account every hour.
It doesn’t work like that.
There are no legitimate Forex trading bots!
There are a lot of scams in the Forex industry so be weary of products that promise a little too much.
With that in mind, there are still plenty of reputable Forex platforms, and it is possible for the average trader to earn some extra cash.
Can You Make Money With Forex?
Certainly you can make money with Forex trading! Unfortunately, most people do not research this business and end up losing a lot of cash.
One way to familiarize yourself with the platform would be to open a practice account with a reputable broker. You’ll also need to deposit more than a hundred dollars.
So it’s more of a money-making method for people who have cash to spare and want to play around with something new.
It’s also risky!
Which brokers can you trust?
I would avoid all lesser-known brokers, there are too many scams out there.
One of the best brokers to date is eToro and you can create a free practice account with them for nothing. The membership area also includes video tutorials that teach you how to make the most of your trades.
There are other company’s too, look for the ones that have the best reviews.
Avoid brokers from third-world countries!
What are the Risks of Forex Trading:
There are quite a few risks attached to the Forex trading industry.
1. Chance to Lose Your Entire Investment:
Forex is a high-risk investment and there’s a chance you’ll lose your whole investment.
To avoid this, it’s best to invest small amounts at a time, and never invest more money than you can afford to lose.
You should always assume that you can lose your investment.
Open small trades, and slowly work to higher amounts while you learn the ropes.
2. Learn to Spot Trends:
A common mistake new Forex traders make is they start opening trades without researching the value trends.
Instead of diving in and buying as soon as possible, it’s best to take a look at where the trend is headed.
To do this, we’ll open XE – a platform to see the values of currencies is real-time.
Choose the currencies you want to convert from the drop down menu.
Next, click “View Full Chart” and you’ll see the chart of values.
From here we’ll be able to see the trends of a currency, when the value decreases and increases. It’s always a good idea to buy when the value is low and then sell when the value increases.
Learning to spot these trends is vital to your success as a Forex trader.
But remember, sometimes these trends are unreliable, and the market can shift dramatically from one day to the next.
Regardless, they’re still a handy way to improve your chances of success.
3. Remove Your Emotions:
To follow up on the previous section, when you notice a trend is about to begin; it’s best not to get too excited. Sometimes the value can increase and then plummet within hours.
Remove your emotions from the trades and try to use as much logic as possible.
It’s easy to feel excited about earning cash from trades but if you don’t analyze the data you might be headed for a loss.
Most Forex traders learn to analyze tiny shifts in the market to predict the next value. Even then, it’s not always a guarantee success. You will lose some trades too.
It’s all about learning how to win more than you lose.
And that’s a challenge – even for experienced traders!
4. Set a Stop-Loss Limit:
This is a feature that closes a trade when the value decreases by a certain ratio. It’s method used to avoid blowing too much cash on trades.
Expert traders recommend setting a stop-loss limit of 2% of the trade.
When you reach the stop-loss limit, the trade will be closed and sold at the current market price.
Do I Recommend Forex Trading?
Forex trading is a legitimate investment but it can also be quite complicated.
There are a lot of risks involved and it is by no means a simple method to earn cash.
With that in mind, if you do have the resources to experiment with Forex, it could be a valuable learning experience. Even if you don’t earn much you’ll still learn a lot about economics and online trading which is a skill that is quite valuable.
On the other hand, if you don’t have the money to invest, I suggest that you avoid Forex for now and pursue a different method with lower risks.
One of the lowest risk businesses you can create is an online business.
I recommend affiliate marketing because it’s very easy to get into and you can easily scale the business.
So the answer to the question, “Can you make money with Forex?” is “YES”.
But it’s not as easy as you think.
Want Something More Stable Than Forex?
Interested in making money online but don’t have the cash for Forex trading?
You can follow a step-by-step online course on how to build a profitable online business from scratch.
There’s an online business center that I found a couple of years ago and it made it possible for me to build an online business that makes money every day.
You can do it too.
If someone asks you, “can you make money with Forex?”, have them check out this post and weigh the pros and cons before they begin.