I
am sure a couple of you will find this post pretty interesting. I have decided
to share my forex trading experience with you in case you are wondering if it
is a good business invest in or possibly do by yourself.
First
the term FOREX is an amalgamation of two words, Foreign (For) and Exchange
(Ex). And it is just about trading different currencies. Basically two
currencies are paired with the stronger one to your left and the weaker to your
light.....e.g. GBP/USD which is a pair of the Great Britain Pounds versus the
US Dollars. Based on market forces, currencies either appreciate or depreciate
against each other in a day and you place a stake on the direction you think
either of the currencies will go.
Guess
the above is sufficient a story for an introduction to forex.
For
me, I first had my first contact with the forex world in 2006 during my youth
service year. To be candid at the time, it looked like I had come in contact
with a gold mine and I dreamt about all the possible things I could get with
the cash ....I mean big cash I would be making from forex. The world seems to
me for the taking and indeed, it was a reality not too farfetched.
First
I enrolled in a training with a friend and house mate who had been involved
with Forex since our university days and he was painstaking in teaching me the
fundaments of the market. I had a lot of materials to read and I was
practically in the school of forex for about 3 months. I believe that in all
endeavors of life, learning the ropes is very important and this will give you
the confidence required to move along.
After
some class sessions in our apartment, he instructed that we open a demo account
and practice the skills we had learnt in class. To be sincere with you, it was
a lot of fun and I couldn't wait to get my mouse on the platform and start
making orders for buys, sells, close, placing stop losses or profit
caps.....these are all terms related to trading forex.
As
a pretty meticulous person, I stayed out of the market for a long time trying
to conduct technical analysis and watching out for my buy or sell signals. This
seems to me the longest waiting period of my life. If you have pretty itchy
fingers like mine, you may just have to stay away from the market.......probably
it's not meant for you, on the contrary, I think it is a skill that can be
learned.....Patience is a great virtue!
I
felt like I had had enough of demo trading after one month with a trading
company in the UK and then went ahead to open my first real account. You don't
want to imagine the amount I staked in it for the first time....please don't
ask me. Life trading is a totally different game, it’s like asking a surgeon to
person an operations procedure on his wife or a close family member.... I was
still but a baby trader and was not DISCIPLINED enough to know when to stay out
of the market or when to go away with my hard earned profits. Did I make
profits....yes I did and with a lot of greed, I practically lost them as fast
as I made the gains. It is always so painful...but I was always over trading
and always glued to my trading platform. I dreamed trades, eat them, drank them
and discussed trades. It practically consumed me. I made some success of it but
my losses were more because what makes a good trader is not the platform or
depth of knowledge although they are very important, rather it is the act of
discipline and patience.
So
here are my recommendations if you must trade forex:
1.You must patiently and committedly learn the trade. It is not a place for you
to make the typical get rich quick money.
2.
Never invest what you can’t afford to lose. I can imagine someone taking all
his life savings to the market. I won't be surprised if you lose everything.
3.
With your learning, you must learn discipline. I guess this is just a golden
rule that determines one's level of success in all endeavors. The market is not
meant to be traded all the time. You can't win all....learn to know when to
quit!
4.
You must have a trading plan and be disciplined enough to stick to it.
5.
Manage your greed! For me, this is the most important rule......this will make
or mar you.
6.
Finally...patience is a very scarce virtue. Be patient with the market, it will
always do what you want it to do.
Ask
me if I still trade the market....personally no because I think I don’t have
enough of the above listed or probably it's not meant for me. However it may
just be the best business idea for you. Explore the possibility and know that
you can do whatever you set your mind to do! Kindly leave a comment in the comment section below and let us share our experience on this.
