As we pointed out in 5 Reasons Why Newbie Traders Should Demo Trade, there are many pros to starting your Forex career in the demo trading pits. However, some negative habits and thought processes may carry through when you begin trading real money.
Many people who are drawn into the allure of the trading world jump straight into the deep end and put their hard-earned money at risk.
If you think about this logically, it doesn’t make much sense. Would you perform heart surgery without any knowledge or practice?
Now I’m not talking about banks because you definitely want to JOIN them (unless you are leaving Forex trading entirely).
What I am talking about is currency pairs. When you go deep into Forex trading, you might hear some traders say, “I’m a USD specialist” or “JPY specialist,” which implies you’ve studied the levels and price action of those particular pairs.
You know, for the longest time, I didn’t understand why I felt I was risking too much when in fact, I was risking my usual 2% per trade and nothing more (except for in my ill-disciplined days!)
This discovery led me to wonder whether my lot sizes were right and if I measured my targets correctly.
I don’t know about you, but I started trading Forex with $100. Now let’s be honest that is not a lot of money to begin your trading journey.
Participating with $100 will not cause a single dent in the market! Please understand the ONLY reason I started with $100 is that it is all I had at the time…
You might have seen articles on this very website that have talked about the untold power of letting profits run. And while I’m a huge fan of letting your trading profits run, I used to be a massive fan of targets.
That part of me hasn’t suddenly disappeared. I’ve just grown to look at trading targets differently.
It costs money to trade. But that doesn’t mean the COST is ONE CONSISTENT PRICE. Instead, brokers offer different pricing options for traders.
If you’re a swing trader or a position trader, this article is probably not for you. Instead, it’s for those of you who have found an edge in trading the market frequently.