“Make $20,000 per month in income trading currencies! Trade on autopilot and rake in the cash!” If you have ever received any of these colorful junk e-mail messages, you are not alone. Across the world, smooth-talking swindlers with get-rich-quick schemes bombard internet users with stories that sound entirely too good to be true. If you harbor hope that forex may be your ticket to overnight riches, you may be just as well served buying a Saturday lotto ticket and hoping to hit the jackpot.
Let’s not mince words here: trading currencies for a living can be a difficult and risky proposition. The lure of high leverage leads many traders to believe that they can turn small trading accounts into small fortunes with minimal effort. Yet the reality of the matter is that most professional traders spend countless hours in front of their terminals refining their craft, studying markets, and putting their capital at risk in order to generate income. Given that they compete with some of the most sophisticated traders in the world on a daily basis, career traders do their utmost to maintain an edge in their trading techniques.
Ask 100 traders on how to get started in the industry and you’ll likely get 100 different answers. Personally speaking, I like to say that you should start by reading up on the market and talking to experienced traders to see if you are legitimately interested in pursuing trading as a career. Once past that point, open a small trading account and put your ideas to the test. Do not be surprised if your first months of trading are unprofitable-this is why you start small from the beginning. You have to learn to walk before you can run.
Yet the last thing you should do is spend countless months pounding away at a single strategy that has yet to produce any real gains. I would argue that the singularly most important factor is recognizing your personal strengths and weaknesses. If you can’t generate profits on a consistent basis despite substantial time and capital spent on trading, maybe currency speculation is not for you. It takes a special type of personality to depend on volatile financial markets for a risky source of income, and I fundamentally believe that some people have what it takes while others don’t.
If trading currencies is something that interests you, then I encourage you to learn as much as you can about it before plying your trade. Perhaps you will be among the minority that can literally leave their day jobs and trade for a living. Speaking from personal experience, many cannot.
Ilya Spivak, Currency Analyst, at DailyFX.com
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