| Choosing
Your Account Type
If you are
trading the Forex part time as a (hopefully paying) hobby, then
you can open an account in your own name. However, if you intend
to trade the Forex full time, as a full time income earner,
then it is best to open a business account. Of course you can
use your own name as the name of your business. Opening a business
account makes it easier when dealing with the IRS (HMRC in the
UK).
You will
also need to decide whether you want to open a standard account,
(dealing in standard lots of $100,000) or a mini account (dealing
in mini lots of $10,000), or if available, a micro account (dealing
in micro lots of $1,000). Always aim to open the smallest account
possible when you first start trading. If you want to trade
with larger amounts, you can simply trade with more than one
lot at a time.
Make
sure you read, and understand the fine print. Also make
sure you open a Forex Spot account,
and not a "forward" or "futures" account.
After all, you want to be able to trade in real time.
You will
most likely need to print and fill out paper forms, and mail
or fax them back to your broker before you can start trading.
When your broker has approved your application they should contact
you with instructions on setting up your account. They will
also explain how you can fund your account. They should also
send you your user name and password so you can log onto your
account online.
---------------
ARTCILE CONTINUES BELOW ---------------
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|
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Warning:
Only trade with real money after at least two
months practice with a free demo account.
Maximizing
Your Chances Of Success
You must
be realistic. Although the Forex has the potential for making
large profits, it is not a get rich quick scheme. You
are not going to profit from all of your Forex trades. Even
the most experienced Forex traders sometimes get it wrong and
make losses. The best you can aim for is to make more profitable
trades than losing trades.
Don't
trade with money you cannot afford to lose. You should have
at least 10 times your margin in your account. If you lose all
the money in your Forex trading account, it should not leave
you broke, without cash to buy food or pay your electric bill.
Do not expect to open an account with a couple hundred dollars
today and become a millionaire by tomorrow.
In reality,
only a very small number of Forex traders are successful. The
reason most traders fail is because of one or more of the following:
• They
do not have the discipline to demo trade for long enough.
• They expect to profit from every trade.
• They are reckless, and trade with money they cannot afford.
• They let their emotions influence their trading strategy.
• They trade with margins that are too small, i.e. too
much leverage.
• They don't take their trading seriously enough, and don't
trade in a businesslike manner.
• They try to make bigger profits by taking unwise risks.
• They start trading with (and losing) real money, before
they have learnt their craft properly through demo trading.
• They start trading with multiple currency pairs, before
they are competent with just one currency pair.
It is
essential that you become competent demo trading, before you
risk one penny of real money. Would you expect to become
a doctor, surgeon or a lawyer overnight?
So don't
expect to become a competent Forex trader overnight.
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