If you are considering taking the plunge and investing in a trading account, there are a lot of choices and decisions to make. Your family, friends and random people on the internet will want to give you advice. They will want to tell you what they like and what they think is right. This can be helpful, but also detrimental. With so many different voices and opinions, it can be difficult to know what it is and why you want to trade.
With that in mind, we've come up with some questions you should ask yourself. They will help you really understand why you are looking to trade and why you should or should not. You may not be able to answer all the questions or you may not be sure of the answer, and that's fine. Take this opportunity to understand them, as this will then allow you to know if trading in the forex market is the right thing for you.
What is your end goal in trading?
When people look at trading, they often see the big numbers and the fortunes that could be made. If that's your end goal, you might get a little surprise. Things are not that simple and people very rarely see these big numbers on their accounts. It is important that you have a more realistic end goal, such as being able to quit your job. C'est possible. Lots of people do it and it's definitely something worth aiming for. Make sure your goal is manageable and you don't forget about it, keep an eye on it to help you stay focused. People will say it's wrong or wrong, but it's your goal, and if you believe in it, you should be able to achieve it. Just make sure you have one,
How do you feel about trading?
Before you think about it, have you ever traded on a real account or a demo account ? You may have already thought about this when you were trading, if not, just think about how you would feel if you traded with your own money. If you're feeling nervous about putting your money on the line or taking a risk with it, trading might not be quite the right thing for you, or you'll need to make sure the strategy or trading style you choose matches your risk tolerance . You must be able to accept a certain level of risk if you want to trade. Also, consider your thoughts and feelings about learning, as many people don't like to sit down and read a lot of information. If you can handle that, that's a big plus.
Do you have enough time to trade?
Trading takes time, a lot of time. If you think about your average week, excluding weekends, how much free time do you actually have? You have to consider your other hobbies, your family, your social life and, of course, your job. 99% of people start trading as a side hobby, something to do after work or on their day off. It's good that you do it alongside your work, but it will end up taking away most of your free time. There will also be limits to what you can do, some trading strategies and styles require you to be in front of the computer for extended periods of time while others only last a few minutes.
Do you have sufficient capital for trading?
To trade, you need money. Although it has become more and more accessible, with accounts being able to be opened from as little as $10, that doesn't mean you'll be able to succeed with that amount, let alone earn enough to achieve the goals you you would have settled down. If you want to succeed and use risk management techniquesappropriate, you will need to make sure you have enough money. Your capital must be in line with your objectives. So, if you want to earn $10 a month, a $100 account might be enough, but if you want to earn $1,000 a month, you will need at least a $10,000 account to do so safely. Trading can be an expensive game, and remember that any money you stake is at risk, you can lose it all, no matter how well you manage your money.
Do I have the necessary determination and dedication?
To be successful, it takes a lot of dedication and commitment. It is true that anyone can trade, anyone can engage in a trade, but it takes time and a lot of effort to fully understand why you are trading and also what trades you should be making. If you get bored easily and like to move on, trading might not be for you. You should go into trading with the idea and understanding that it is a long-term business, that is, several years, if not a lifetime. You won't be successful right away, in fact the majority of people who trade quit within the first year, either because they lost or they were bored.
The beginning of your trading journey occurs long before the first trade has been made. It happens long before you sign up with a broker and it even started before you read your first educational article. Right from the start, you need to ask yourself if the prospect of being a trader is right for you. If you're not sure or think it's not for you, there's nothin