Foreign Exchange Trading, FOREX, is often mentioned as a potential Side Income Earner. In nearly the same breath, it is immediately dismissed by many people as being way too risky, too complex, and only the preserve of the big banks.
That belief is wrong. FOREX is a viable Side Income Earner for many people, it just needs to be de-mystified.
Five Common FOREX Myths
Myth 1. Trading is way too risky. This is wrong. It will be risky, like mountain climbing, for anybody who does not know what they are doing. When you learn the controls which you can utilise to minimise your risk, then you will appreciate that it is probably no more risky than many of your current activities.
Myth 2. Brokers are out for you. Wrong again. Whatever success you have, you will only be a small micro percentage of the $5trillion which is traded daily. Brokers want your business. You are their lifeline and not their death sentence.
Myth 3. If you’re going to trade, you need to do it full time. There are lots of full time professional brokers, but you don’t have to do it that way. As long as you are disciplined and use your time effectively you can do it with as little as an hour per day.
Myth 4. All traders are geniuses. That again is wrong. If you follow a strategy, are attentive to detail and focussed on what you are doing, then you will be able to trade with success.
Myth 5. You need to understand everything that’s going on, otherwise it’s just gambling. Certainly, if you have no awareness of what is going on then you are gambling. You can, however, pay monthly subscriptions for information feeds which will provide you with sufficient real time data and information to allow you to trade.
So, What does FOREX entail?
It is possible to become a successful side income FOREX trader. You should learn about the markets and how to trade in advance of getting involved.
How do I get started?
We would recommend a six stage approach to get you going.
Step 1. Attend some training from experts. We have used Lifestyle Trader and Learn to Trade, both with Greg Secker, but there are others as well.
When choosing your training provider do some research on who they are, what success they have achieved, and how long they have been training others in these skills. Beware the get rich quick training provider.
Step 2. Identify what software you will be using to help you. Given the speed of the markets, it is highly unlikely that you can achieve success without software support.
There are numbers of free applications available. We have not tried or tested these. Experience in seeking out this type of opportunity is that free software rarely solves your problem when it comes to creating money.
We have used Smartcharts, and this came with the training package from Learn to Trade. There is a monthly feed subscription charge.
Step 3. Get an FCA regulated broker. Without a broker you will be unable to trade.
Step 4. Identify the strategies you will be applying. Successful traders are never successful on every trade. Through the application of, and adherence to, a strategy they are able to contain losses and build a pattern of more wins than losses.
One of the common messages we have been told be traders is, “when you stop following a strategy, you become a gambler.”
Step 5. Adopt strict risk tolerance on any trades. Early on this may be limiting any potential loss to 2% through the use of Stoplosses controls.
Step 6. Seek out coaches and mentors. Markets and tools change. Likewise we can all slip into poor habits and practices without realising. Having some coaches or a mentor with whom you can talk, will help to keep you infomred and focussed on doing the right things.
What is the earnings potential?
When you do start, your potential earnings will be proportionate to the capital you can make available for trading. You can earn 2% or more per week, but there is no guarantee of this.
Remember that FOREX trading is no guarantee of success and you can lose your capital.
