Should You Become A Forex Trader?

With the lack of jobs available these days and the uncertain economic situation, its no surprise that many people are looking to Forex trading as a career. The lure of working from home and making profits every day sounds great, but the reality is some what different.

Learning to trade Forex successfully is major undertaking, and it is likely to take most people several years to become consistent. But it can be done, so long as you put in a huge amount of effort and are willing to take a lot of pain along the way. There will be times when it seems impossible, but if you can overcome the doubt during the bad times and turn it in to positive thoughts and actions, you can succeed.

Before you decide if Forex trading is right for you, you need to look at your situation. First if all to be a successful trader you need money, and the more the better. There is so little chance that you can succeed with a few hundred dollars, that there is no point trying. The amount you will need depends on how good a trader you become, some people may be-able to make a 1000% in a year, therefore a few thousand may be all that is required. But for most successful traders 50-200% are the most they will make in a year.

If you have a family to support, have just lost your job, but have a couple of thousand saved there is no way you should even consider Forex trading. The stakes are too high. You should never trade with money you can't afford to lose, never!

The cash you have for trading must be disposable, so if you lose it all it wont affect your lifestyle. Its not only important that it doesn't affect lifestyle, but that it doesn't cause you to make emotional mistakes when trading. Trading with money you cannot afford to lose will make you over protective of your capital, this is called "scared money" and because you are scared to lose it, you will not be-able to accept the risks in Forex.

But if you do not have the money all is not lost, you can practice trading Forex with a demo account. These are the same as real trading accounts except that it is funded with fake money. These are available from most brokers and only take a few minutes to set up. There is no financial risk in demo trading, and you can practice until your hearts content.

But be warned, making a huge profit in a few weeks means very little. I have seen many people make 200% in a week or so and then think they are geniuses. Trading with real money is very different, you have the fear and the greed to contend with all the time. Demo trading can only take you so far.

I would recommend at least a year demo trading, before trying real money. This way you will experience nearly all market conditions, and you will have gained a great deal of knowledge about the markets.

After a year you can analyse your own situation and see if you are in the position to risk real money in the markets. But if your not than don't. You should continue with demo until you have the means to trade.

If you do decide you are in a position to take the risks involved, be prepared to lose money to start with. Nearly every new trader loses money. But its those people who break through the barriers that are put before us that ultimately succeed. If you are a quitter and don't put in the effort required there is very little chance of success.