Beginners lose money in Forex

There is feast and famine in forex. Some traders make over six figures a year, they drive expensive cars, and they live in large homes; They are the minority who enjoy the feast. The majority suffer the famine; They lose their savings and have trouble paying their car payment and rent/mortgage. I have read some estimates that as much as 90% of forex traders this year will lose money.

Making money with forex is not impossible. As with most things, you get out what you put in. Profitable forex trading has a steep learning curve. It takes most beginners at least 1 year to become a profitable trader.

The first step to becoming a profitable trader is to learn everything you can about Forex. There is plenty of information both online, and offline, that beginners can learn from. You may need to wade through the murky waters of online Forex information to find unbiased information. Most Forex sites out there are trying to sell something. Books are a great resource for the Forex beginner. Visit your local library to make use of free resources before purchasing a Forex book.

The second step to becoming a profitable trader is to trade, without real money. Make use of a demo/free/practice account to trade Forex. Most Forex trading sites offer a demo accounts. Practice strategies with the demo account until you have reached 3 months of consecutive profits. Cautiously fund an account after you have reached 3 months of consecutive profits in your demo account. Cautiously is the keyword here. Some beginners can trade profitably with demo accounts yet they have difficulty when their money is at stake. The psychological aspect of trading may be difficult to overcome, for some it may be more difficult than learning the technical aspects of trading Forex. Remember that most beginners lose money. The last thing you want to do is lose everything you have.

Tags: Demo, Loss, Psychological