Forex for beginners products are usually filled with crazy levels of hype about the astounding profits you can make trading forex. It’s not uncommon to be told that a beginner can go from scratch to millions by using only a cheap piece of software, which continues to make money even while you watch tv.
Needless to say these suggestions are simply marketing tactics.
Sure, you can make a lot of money trading the forex markets but if you are a forex beginner then you need to be aware of the following critical trading truths.
1. There is no such thing as a free lunch, in life or in trading. As a newcomer you will come across a lot of adverts for auto forex programs which promise amazing profits. Unfortunately, most of these systems are useless. If you want to make regular profits in the forex market then you need to study a trading system that will teach the basics and help you design your own trading approach.
2. The great news is that forex trading is not rocket science. In fact quite the opposite, the best traders will explain to you that their success comes from the ability to ‘Keep It Simple’. Many beginners to the forex markets think that the more complicated their trading system or the more fancy screens and flashing indicators they use then they will make more money. This is a common and costly error, profitable trading comes from an effective blend of only a few simple factors: when to start a trade, when to exit and how much capital to risk. Anything more than that is just padding.
3. Managing your risk is key to your long term success as a trader. Quite often, this aspect of trading is overlooked by new traders who are usually more interested and seduced by the latest graphic indicator or automated trading tool. However, managing the amount of money you have at risk at any one time (money management) is a critical part of any successful trading method. Particularly as a forex beginner you need to protect your trading account as you upgrade your trading skills.
4. The emotional aspect of trading is also instrumental in the long term success of any trader. Again, most leading professional forex traders will confirm that they spend more time improving their emotional armoury and money management than they do fine tuning their trading system.
If you embrace these four trading facts then there is no reason why you will not achieve fantastic profits from your currency trading. Avoid them however and you are very likely to add to the majority of forex traders who never take the time to learn their craft and fail to become profitable.