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A paper trade refers to using simulated trading to practice buying and selling securities without actual money being involved. This Reddit will be used as a platform for paper traders to discuss and practice strategies with a trade bot. Leaderboard: https://trendfriend.info/leaderboard
How many profitable trading account months (on average) before you would suggest someone start trading with real money? And what's a good amount of real money to trade with for my purposes?
I'm ending my first month of trading a Forex practice account up 1.5%. I'm pretty pleased with this outcome since my goal is to one day turn this into a job and not to get a crazy high rate of return or expect to get rich quick. My system and approach right now seems to be best described as "trend trading". It's mostly based off of "Naked Forex" (the book) and ForexSignals TV (a YouTube channel) but I've used a variety of other sources' advice as well. I also read the news quite a bit, usually for a few hours a day. My long term goal is to get a stable rate of return with a practice account and then move on to a significant but not huge amount of money, perhaps try to get sponsored or otherwise take the appropriate series exams (I had an offer to get paid to study and take the Series 63 at one point in time but since I had no actual trading experience, I passed it up for other opportunities), then if my practice account months go well I would start trading with a significant amount of real money while ideally not risking my savings. Finally, if I can turn a stable profit for X time on that I would start looking for a job or internships, perhaps go back to the guys who made me that offer some time ago by now. Unfortunately my educational background has no economics study at all, even though it was good enough that I had that offer to get paid a modest salary to study for the Series 63 and try my hand at a brokerage job, although that specific job offer was more of a personal relations thing and not as a trader myself. So to recap, here's my questions: (1) How many months would you imagine is appropriate with a practice account before moving on to real money? (2) If your goal was to get a job in a bank or a similar institution, what's the minimum amount of real money you would like to see in a real account before you would treat someone with no economics educational background as a serious candidate for such a job? Thank you for your replies!
Spark Profit is a fun way to get your feet wet with Forex without risking any actual money (but possibly winning some)
Hey everyone! I posted a detailed review of Spark Profit in beermoney but I realized it might actually might be more relevant here. Basically, Spark Profit is a game that gives you points for accurately predicting the movement of various currency pairs. If you earn enough points, you can earn small amounts of cash. It has a very simple interface, so it's a less intimidating way to jump in than some of the Forex practice accounts. You can read my full description here.
Hey guys. Just curious but on my practice account, my equity = $8.57 and my balance = -$3.42. Does this mean I owe the broker or is my equity all that matters? It's strange because at the moment I have no open trades so wouldn't that mean my balance = equity? Any help or advice would be much appreciated :D
Deciding if I should pursue a career in forex trading (as a 15 year old)
Hey everyone, I’m a teenager living in the uk and in the past 9 months or so I’ve been trying to decide what I want to do once I leave school. Long story short I have lots of interests but my ultimate goal in life is to travel the world and gain ‘financial freedom’. I know this sounds very typical of a teenager which has been exposed to gurus or whatever but I want some opinions off some professional or experienced traders not these gurus trying to sell me something. I would just like to know if forex trading is a career where you can be very successful and I will start learning as soon as I can, I’ve learnt all the basics but I want to keep learning more about it so I’m ready to trade real money when I’m 18. I really hope I don’t come across as just some idiot who thinks it’s a get rich quick scheme because I certainly know it’s not. I would really appreciate any advice and comments if anyone sees this, Thank you
Hi all! I just started learning Forex trading last week and i don't have any professionals to guide me so i'm hoping i could find some help here. I'm not a very smart person when it comes to this so i apologize in advance if i end up asking pretty dumb questions.
So far i have learned about PIPs, leverage, stoploss for risk management and reading the candlestick chart. The topics in this area could be very broad so i'm wondering what are some of the other areas i should look into as well.
As a beginner, how do i know i'm confident enough to actually start trading with real money? I don't intend to jump straight into trading but i'm wondering how much time i should invest on researching and self-teaching.
Is it possible to invest as low as $10? I'm currently residing in Canada and i'm not sure which broker is the best to use.
I honestly do have A LOT more questions but i will settle for the three questions above i have for now. Would appreciate if there are any professionals out there who could guide me along. Thanks in advance! Edit: I have been approached by a couple of "traders" through private messages promoting their own websites and courses with a fee required from me. Please do not approach me for any self-promotion for your business. Thank you!
I have $20 and 0 knowledge. Can I start with that much money and how much time should I spend learning before I start my first trade?
I'm 21 and want to take a shot at forex. Don't really have anything to lose and I have all the time in the world due to the quarantine. I already have a college degree but can't really use it. I'm willing learn and stick with this but I've heard about scammers and fake trading youtubers. Any advice would be great, thanks!
(JA) I want to help my parents because times are rough and I'm thinking of doing forex trading.
I'm a (20m) living in Jamaica and I'm going to university. I'm unable to go out to work do to COVID because I have some underlying health conditions that could put me at a higher risk so my family is adamant on me staying inside. In the past 2 months, my parents lost half their income and its getting worse. I bought a forex class from Udemy and I really want it to work out. The sad thing is I only have like $120us and if I lose that it would be really hard to come by that money again for a bit. so my question is should I give it a shot or should I try and look into other options. Appreciate all advice. edit: thanks for all the advice guys. I didn't go through with the forex trading. I convinced my parents to make more involved their business and I'm trying to think of new innovative ways to help them make more money. I'm also gonna try to learn more skills so I can try and make somehow. It's not too good now but I believe I'll be alright hopefully.
Everything You Always Wanted To Know About Swaps* (*But Were Afraid To Ask)
Hello, dummies It's your old pal, Fuzzy. As I'm sure you've all noticed, a lot of the stuff that gets posted here is - to put it delicately - fucking ridiculous. More backwards-ass shit gets posted to wallstreetbets than you'd see on a Westboro Baptist community message board. I mean, I had a look at the daily thread yesterday and..... yeesh. I know, I know. We all make like the divine Laura Dern circa 1992 on the daily and stick our hands deep into this steaming heap of shit to find the nuggets of valuable and/or hilarious information within (thanks for reading, BTW). I agree. I love it just the way it is too. That's what makes WSB great. What I'm getting at is that a lot of the stuff that gets posted here - notwithstanding it being funny or interesting - is just... wrong. Like, fucking your cousin wrong. And to be clear, I mean the fucking your *first* cousin kinda wrong, before my Southerners in the back get all het up (simmer down, Billy Ray - I know Mabel's twice removed on your grand-sister's side). Truly, I try to let it slide. Idomybit to try and put you on the right path. Most of the time, I sleep easy no matter how badly I've seen someone explain what a bank liquidity crisis is. But out of all of those tens of thousands of misguided, autistic attempts at understanding the world of high finance, one thing gets so consistently - so *emphatically* - fucked up and misunderstood by you retards that last night I felt obligated at the end of a long work day to pull together this edition of Finance with Fuzzy just for you. It's so serious I'm not even going to make a u/pokimane gag. Have you guessed what it is yet? Here's a clue. It's in the title of the post. That's right, friends. Today in the neighborhood we're going to talk all about hedging in financial markets - spots, swaps, collars, forwards, CDS, synthetic CDOs, all that fun shit. Don't worry; I'm going to explain what all the scary words mean and how they impact your OTM RH positions along the way. We're going to break it down like this. (1) "What's a hedge, Fuzzy?" (2) Common Hedging Strategies and (3) All About ISDAs and Credit Default Swaps. Before we begin. For the nerds and JV traders in the back (and anyone else who needs to hear this up front) - I am simplifying these descriptions for the purposes of this post. I am also obviously not going to try and cover every exotic form of hedge under the sun or give a detailed summation of what caused the financial crisis. If you are interested in something specific ask a question, but don't try and impress me with your Investopedia skills or technical points I didn't cover; I will just be forced to flex my years of IRL experience on you in the comments and you'll look like a big dummy. TL;DR? Fuck you. There is no TL;DR. You've come this far already. What's a few more paragraphs? Put down the Cheetos and try to concentrate for the next 5-7 minutes. You'll learn something, and I promise I'll be gentle. Ready? Let's get started. 1.The Tao of Risk: Hedging as a Way of Life The simplest way to characterize what a hedge 'is' is to imagine every action having a binary outcome. One is bad, one is good. Red lines, green lines; uppie, downie. With me so far? Good. A 'hedge' is simply the employment of a strategy to mitigate the effect of your action having the wrong binary outcome. You wanted X, but you got Z! Frowny face. A hedge strategy introduces a third outcome. If you hedged against the possibility of Z happening, then you can wind up with Y instead. Not as good as X, but not as bad as Z. The technical definition I like to give my idiot juniors is as follows: Utilization of a defensive strategy to mitigate risk, at a fraction of the cost to capital of the risk itself. Congratulations. You just finished Hedging 101. "But Fuzzy, that's easy! I just sold a naked call against my 95% OTM put! I'm adequately hedged!". Spoiler alert: you're not (although good work on executing a collar, which I describe below). What I'm talking about here is what would be referred to as a 'perfect hedge'; a binary outcome where downside is totally mitigated by a risk management strategy. That's not how it works IRL. Pay attention; this is the tricky part. You can't take a single position and conclude that you're adequately hedged because risks are fluid, not static. So you need to constantly adjust your position in order to maximize the value of the hedge and insure your position. You also need to consider exposure to more than one category of risk. There are micro (specific exposure) risks, and macro (trend exposure) risks, and both need to factor into the hedge calculus. That's why, in the real world, the value of hedging depends entirely on the design of the hedging strategy itself. Here, when we say "value" of the hedge, we're not talking about cash money - we're talking about the intrinsic value of the hedge relative to the the risk profile of your underlying exposure. To achieve this, people hedge dynamically. In wallstreetbets terms, this means that as the value of your position changes, you need to change your hedges too. The idea is to efficiently and continuously distribute and rebalance risk across different states and periods, taking value from states in which the marginal cost of the hedge is low and putting it back into states where marginal cost of the hedge is high, until the shadow value of your underlying exposure is equalized across your positions. The punchline, I guess, is that one static position is a hedge in the same way that the finger paintings you make for your wife's boyfriend are art - it's technically correct, but you're only playing yourself by believing it. Anyway. Obviously doing this as a small potatoes trader is hard but it's worth taking into account. Enough basic shit. So how does this work in markets? 2. A Hedging Taxonomy The best place to start here is a practical question. What does a business need to hedge against? Think about the specific risk that an individual business faces. These are legion, so I'm just going to list a few of the key ones that apply to most corporates. (1) You have commodity risk for the shit you buy or the shit you use. (2) You have currency risk for the money you borrow. (3) You have rate risk on the debt you carry. (4) You have offtake risk for the shit you sell. Complicated, right? To help address the many and varied ways that shit can go wrong in a sophisticated market, smart operators like yours truly have devised a whole bundle of different instruments which can help you manage the risk. I might write about some of the more complicated ones in a later post if people are interested (CDO/CLOs, strip/stack hedges and bond swaps with option toggles come to mind) but let's stick to the basics for now. (i) Swaps A swap is one of the most common forms of hedge instrument, and they're used by pretty much everyone that can afford them. The language is complicated but the concept isn't, so pay attention and you'll be fine. This is the most important part of this section so it'll be the longest one. Swaps are derivative contracts with two counterparties (before you ask, you can't trade 'em on an exchange - they're OTC instruments only). They're used to exchange one cash flow for another cash flow of equal expected value; doing this allows you to take speculative positions on certain financial prices or to alter the cash flows of existing assets or liabilities within a business. "Wait, Fuzz; slow down! What do you mean sets of cash flows?". Fear not, little autist. Ol' Fuzz has you covered. The cash flows I'm talking about are referred to in swap-land as 'legs'. One leg is fixed - a set payment that's the same every time it gets paid - and the other is variable - it fluctuates (typically indexed off the price of the underlying risk that you are speculating on / protecting against). You set it up at the start so that they're notionally equal and the two legs net off; so at open, the swap is a zero NPV instrument. Here's where the fun starts. If the price that you based the variable leg of the swap on changes, the value of the swap will shift; the party on the wrong side of the move ponies up via the variable payment. It's a zero sum game. I'll give you an example using the most vanilla swap around; an interest rate trade. Here's how it works. You borrow money from a bank, and they charge you a rate of interest. You lock the rate up front, because you're smart like that. But then - quelle surprise! - the rate gets better after you borrow. Now you're bagholding to the tune of, I don't know, 5 bps. Doesn't sound like much but on a billion dollar loan that's a lot of money (a classic example of the kind of 'small, deep hole' that's terrible for profits). Now, if you had a swap contract on the rate before you entered the trade, you're set; if the rate goes down, you get a payment under the swap. If it goes up, whatever payment you're making to the bank is netted off by the fact that you're borrowing at a sub-market rate. Win-win! Or, at least, Lose Less / Lose Less. That's the name of the game in hedging. There are many different kinds of swaps, some of which are pretty exotic; but they're all different variations on the same theme. If your business has exposure to something which fluctuates in price, you trade swaps to hedge against the fluctuation. The valuation of swaps is also super interesting but I guarantee you that 99% of you won't understand it so I'm not going to try and explain it here although I encourage you to google it if you're interested. Because they're OTC, none of them are filed publicly. Someeeeeetimes you see an ISDA (dsicussed below) but the confirms themselves (the individual swaps) are not filed. You can usually read about the hedging strategy in a 10-K, though. For what it's worth, most modern credit agreements ban speculative hedging. Top tip: This is occasionally something worth checking in credit agreements when you invest in businesses that are debt issuers - being able to do this increases the risk profile significantly and is particularly important in times of economic volatility (ctrl+f "non-speculative" in the credit agreement to be sure). (ii) Forwards A forward is a contract made today for the future delivery of an asset at a pre-agreed price. That's it. "But Fuzzy! That sounds just like a futures contract!". I know. Confusing, right? Just like a futures trade, forwards are generally used in commodity or forex land to protect against price fluctuations. The differences between forwards and futures are small but significant. I'm not going to go into super boring detail because I don't think many of you are commodities traders but it is still an important thing to understand even if you're just an RH jockey, so stick with me. Just like swaps, forwards are OTC contracts - they're not publicly traded. This is distinct from futures, which are traded on exchanges (see The Ballad Of Big Dick Vick for some more color on this). In a forward, no money changes hands until the maturity date of the contract when delivery and receipt are carried out; price and quantity are locked in from day 1. As you now know having read about BDV, futures are marked to market daily, and normally people close them out with synthetic settlement using an inverse position. They're also liquid, and that makes them easier to unwind or close out in case shit goes sideways. People use forwards when they absolutely have to get rid of the thing they made (or take delivery of the thing they need). If you're a miner, or a farmer, you use this shit to make sure that at the end of the production cycle, you can get rid of the shit you made (and you won't get fucked by someone taking cash settlement over delivery). If you're a buyer, you use them to guarantee that you'll get whatever the shit is that you'll need at a price agreed in advance. Because they're OTC, you can also exactly tailor them to the requirements of your particular circumstances. These contracts are incredibly byzantine (and there are even crazier synthetic forwards you can see in money markets for the true degenerate fund managers). In my experience, only Texan oilfield magnates, commodities traders, and the weirdo forex crowd fuck with them. I (i) do not own a 10 gallon hat or a novelty size belt buckle (ii) do not wake up in the middle of the night freaking out about the price of pork fat and (iii) love greenbacks too much to care about other countries' monopoly money, so I don't fuck with them. (iii) Collars No, not the kind your wife is encouraging you to wear try out to 'spice things up' in the bedroom during quarantine. Collars are actually the hedging strategy most applicable to WSB. Collars deal with options! Hooray! To execute a basic collar (also called a wrapper by tea-drinking Brits and people from the Antipodes), you buy an out of the money put while simultaneously writing a covered call on the same equity. The put protects your position against price drops and writing the call produces income that offsets the put premium. Doing this limits your tendies (you can only profit up to the strike price of the call) but also writes down your risk. If you screen large volume trades with a VOL/OI of more than 3 or 4x (and they're not bullshit biotech stocks), you can sometimes see these being constructed in real time as hedge funds protect themselves on their shorts. (3) All About ISDAs, CDS and Synthetic CDOs You may have heard about the mythical ISDA. Much like an indenture (discussed in my post on $F), it's a magic legal machine that lets you build swaps via trade confirms with a willing counterparty. They are very complicated legal documents and you need to be a true expert to fuck with them. Fortunately, I am, so I do. They're made of two parts; a Master (which is a form agreement that's always the same) and a Schedule (which amends the Master to include your specific terms). They are also the engine behind just about every major credit crunch of the last 10+ years. First - a brief explainer. An ISDA is a not in and of itself a hedge - it's an umbrella contract that governs the terms of your swaps, which you use to construct your hedge position. You can trade commodities, forex, rates, whatever, all under the same ISDA. Let me explain. Remember when we talked about swaps? Right. So. You can trade swaps on just about anything. In the late 90s and early 2000s, people had the smart idea of using other people's debt and or credit ratings as the variable leg of swap documentation. These are called credit default swaps. I was actually starting out at a bank during this time and, I gotta tell you, the only thing I can compare people's enthusiasm for this shit to was that moment in your early teens when you discover jerking off. Except, unlike your bathroom bound shame sessions to Mom's Sears catalogue, every single person you know felt that way too; and they're all doing it at once. It was a fiscal circlejerk of epic proportions, and the financial crisis was the inevitable bukkake finish. WSB autism is absolutely no comparison for the enthusiasm people had during this time for lighting each other's money on fire. Here's how it works. You pick a company. Any company. Maybe even your own! And then you write a swap. In the swap, you define "Credit Event" with respect to that company's debt as the variable leg . And you write in... whatever you want. A ratings downgrade, default under the docs, failure to meet a leverage ratio or FCCR for a certain testing period... whatever. Now, this started out as a hedge position, just like we discussed above. The purest of intentions, of course. But then people realized - if bad shit happens, you make money. And banks... don't like calling in loans or forcing bankruptcies. Can you smell what the moral hazard is cooking? Enter synthetic CDOs. CDOs are basically pools of asset backed securities that invest in debt (loans or bonds). They've been around for a minute but they got famous in the 2000s because a shitload of them containing subprime mortgage debt went belly up in 2008. This got a lot of publicity because a lot of sad looking rednecks got foreclosed on and were interviewed on CNBC. "OH!", the people cried. "Look at those big bad bankers buying up subprime loans! They caused this!". Wrong answer, America. The debt wasn't the problem. What a lot of people don't realize is that the real meat of the problem was not in regular way CDOs investing in bundles of shit mortgage debts in synthetic CDOs investing in CDS predicated on that debt. They're synthetic because they don't have a stake in the actual underlying debt; just the instruments riding on the coattails. The reason these are so popular (and remain so) is that smart structured attorneys and bankers like your faithful correspondent realized that an even more profitable and efficient way of building high yield products with limited downside was investing in instruments that profit from failure of debt and in instruments that rely on that debt and then hedging that exposure with other CDS instruments in paired trades, and on and on up the chain. The problem with doing this was that everyone wound up exposed to everybody else's books as a result, and when one went tits up, everybody did. Hence, recession, Basel III, etc. Thanks, Obama. Heavy investment in CDS can also have a warping effect on the price of debt (something else that happened during the pre-financial crisis years and is starting to happen again now). This happens in three different ways. (1) Investors who previously were long on the debt hedge their position by selling CDS protection on the underlying, putting downward pressure on the debt price. (2) Investors who previously shorted the debt switch to buying CDS protection because the relatively illiquid debt (partic. when its a bond) trades at a discount below par compared to the CDS. The resulting reduction in short selling puts upward pressure on the bond price. (3) The delta in price and actual value of the debt tempts some investors to become NBTs (neg basis traders) who long the debt and purchase CDS protection. If traders can't take leverage, nothing happens to the price of the debt. If basis traders can take leverage (which is nearly always the case because they're holding a hedged position), they can push up or depress the debt price, goosing swap premiums etc. Anyway. Enough technical details. I could keep going. This is a fascinating topic that is very poorly understood and explained, mainly because the people that caused it all still work on the street and use the same tactics today (it's also terribly taught at business schools because none of the teachers were actually around to see how this played out live). But it relates to the topic of today's lesson, so I thought I'd include it here. Work depending, I'll be back next week with a covenant breakdown. Most upvoted ticker gets the post. *EDIT 1\* In a total blowout, $PLAY won. So it's D&B time next week. Post will drop Monday at market open.
I got interested in forex from a coworker who was using a paid subscription to some group that handed out trade advice and tips. He was paying 200$ a month but showed me his account which had gone from $500 to $6000 in about 3 months. I did some research and decided against joining his trading group or scheme or whatever. I spent a month on mt4 with a practice account that started with 10k. I was very successful for that month and was gaining about $250 a week making 3-5 trades a day. After that month I opened an account with $500 with IG. I quickly lost about a Hundo the first week because I was still making trades with the 10k bank mentality and had to close out a bunch of stuff when funds were running thin. After I realized my stupid mistake and started trading .01 instead of .1 I have hovered around for a few weeks and am now down another $50. I don’t know if it was just dumb beginners luck that made my month of pretend trading seemingly successful. I I have watched lots of YouTube and read lots of things about trading but now that real money’s on the line and my luck has run out I’m seriously overwhelmed. It seems like there are a million different strategies or ways to read the market. The fairly uninformed methods I used with fake money seem to fail 80% of the time. Does anyone have advice for comprehensive lessons or strategy formation that I can look into? I’m willing to put in time learning and developing skills. Due to a full time job and fucked up schedule I really only have a small amount of time during the day to analyze charts and trade. Usually between noon and 10pm eastern time and in small segment of 20 minutes here and there. The money I have put in I’m ok with losing granted I’d rather not. At this point is more a point of proving I can do this than making money. I hate failing at things I know are doable. If you had to learn from scratch and had the time and motivation to do so where would you turn for lessons.
So over the last year maybe just under, I have been playing around with learning forex. I began for months on a demo account. I too like many looked to make some side cash. I studied, I read ample amount of things. I practiced. Sometimes I got it right, other times all the clues was there, and I'd still lose. I went live three months ago, and over those three months I lost 1% overall. Now, what I really learnt: one small error can lead to a big mistake. One small bit of luck can land you big time. Small lot trading wasnt working for me. I only traded, what I couod afford to trade, and never took the risk to raise me lot size or my liability. I stuck to my plan. It didn't work. I'm happy to withdraw most of my initial investment and walk away. Too many people I have seen keep going chasing thay golden carrot. Its not me and its not for many. I hope many take heed and walk away IF you are in my boat. I dont have the time to fully invest into it right now. And accepting that I must walk away. Good luck to many, even after a year of learning it was clear i still had much to learn. Good luck everyone!
Forex** G'day everyone, I'm looking for a little guidance. I started doing a bit of Forex after about a week of preparation and another week of using a practice account. Things went very well as I observed the patterns and implemented this little strategy into real money through Trading212. Looking at the news and assessments from Trading212 to try and predict what the market would do a tiny bit more accurately. At first it went very well, with about £50 in the account I managed to make about £10 over 3 days. A few pennies here, and a few pennies there. It quickly built up with about 12 trades per day. I soon added more money. However I ended up getting a bit too cocky and lost about £50 with about £250 in my trading account in total. I knew I would take a loss eventually, but as the GBP/USD started to plummet immediately afterwards I sought to accept that loss as it didn't seem to increase anytime soon. Obviously if I held that trade for a week and a bit I would have been in the green, but alas it shows I need to work on my risk management and strategy. I leaped into it too soon, and after a week of making solid profit, albeit pennies, followed a stream of red and a huge loss of £44. As soon as I bought or sold, the market would increase or drop in the opposite direction to where I wanted it to go, this seemed to happen every single time regardless of how much money I would use. I have currently ceased trading as I needed the money in the trading account for the time being. Using this time out to sit back, ideally I would like to start afresh, with a little guidance, reading material, strategy and risk assessment. Any sources and material would be HUGELY appreciated. Many thanks and happy trading.
Forex has popped up on my radar on/off over the years but I did minimal research on it. I do keep up with economics and feel that I understand the whys/whens/hows on when things happen... I just never looked into Forex. Recently Forex has popped up on my radar again... I have a few friends in Japan and a few more here in the states that trade. I've started researching, consuming as much information, studying chart-to-news-comparisons/trends/strategies/etc. I've started the Babypips course. I've also been playing with a demo account. I've seen horror stories of people jumping in thinking it's a get-rich thing. Even with little research on it, it's easy and obvious to realize you can't make money overnight. Just from 2 weeks of diving in, I'm not even thinking about the make money side of it. The way the currency markets move fascinates me. It seems crazy to me that people put their money in without at least 6 months of research and practicing on a demo account. In the future when I do put money in... do people not know about risk management? Risk management is screamed from the rooftops in this community/industry. Of course, you aren't going to win every trade... so don't put half to all of your account toward one trade. I keep seeing/hearing the word mentor come up. Seems weird to me. Even one of my trader friends has a mentor. The other doesn't. Why would anyone trust any of these flashy IG/YT people? I'm sure some of them are fine but it already seems like there are a ton of things you need to learn on your own if you're interested in getting involved in these markets.
I've played around paper trading, read a couple books, and lurked a few forums for a while, but I'd like to start live trading in the mornings. I unfortunately do not have the $25k to put into trading yet, especially with the possibility of losing quite a bit while I'm still learning. I have about 5-7k I can bankroll, what would you recommend I start with? Less than 3 trades a week? Futures? Swing trading? Forex? I personally like the idea of Forex for now, but I have no knowledge there so I've been looking at different forex classes like the one from Investopedia. Thoughts?
Forex markets can be volatile and uncertain at the best of times, and inexperienced traders can easily end up chasing their losses. Yet it is precisely this volatility that gives you the potential for major profits. These 10 rules offorex tradingmay give you the best chance of landing on the winning side. Please remember, however, that trading carries a high level of risk to your capital, and profit is not guaranteed. Over 95% of all new individuals lose all their capital in the first month of trading forex
1. Avoid forex trading software that claims to guarantee returns
While you’re on the hunt for forex trading software, be sure that you’re not taken in by promises of guaranteed returns. There is no forex trading software that can assure you of winning trades. If there was, why would anyone sell it?
2. Always use a demo trading account
We’ve all heard that practice makes perfect, and it’s true. A demo trading account can help you improve your trading skills with virtual trades in real markets. Once you’re skilled at demo trading, you can switch over to real-money forex trading. And even once you’re using a live account, you may still want to use your demo account to try out new forex trading strategies. Of course, you should always remember that your performance on a demo account may not be replicated in a live trading account.
3. Forex trading can be highly stressful – avoid emotional trading
Whenever real money is changing hands, the risk of loss is ever-present. Therefore you should base your trades on considered tactics and strategies. To avoid being led by your emotions stay focused on technical and fundamental factors and market news at all times.
4. Invest in a solid forex education
Knowledge is power – we all know that. Ensure that your forex provider gives you access to tutorials, webinars, expert financial analysis and commentary, an economic calendar, graphs and charts, and even forex trading signals. All of these tools will work to improve your trading performance. The ultimate goal is to generate greater profits than losses over time, even if you have less winning trades than losing trades.
5. You can learn to trade forex successfully
No forex trading system guarantees success (see rule 1) but some may be used as reliable guides. If you learn from the experience of successful forex strategists, your likelihood of success is far greater. But remember, when judging the results of any system or any expert, that past performance is not a reliable indicator of future results.
6. Manage your forex capital wisely
The forex markets can change on a dime, as currency markets are often characterized by high volatility. If you have generated winning trades, be sure to manage your profits. Use stop-loss and limit orders, closeout positions, and hedge your exposure to the best of your ability. Be sure that you are in control of your capital at all times.
7. Manage your investment-per-trade wisely
This is one of the most crucial aspects of forex trading. Many traders fail to heed this important advice: Don't trade more than one currency at a time. Doing so puts you at a significant risk of loss. If you spread your investments over a wide number of trades, you limit your overall losses by not putting all your proverbial eggs into one basket!
8. Use common sense
If you know you’re trading a strong currency against a weak currency, chances are the strong currency will dominate. We are going through a period now where USD is a strong global currency. With a Fed rate hike looming, you may want to back USD against emerging-market currencies. Use your common sense when judging the effect of current and upcoming events.
9. Ensure you use risk protection strategies at all times
Risk protection varies from one trader to the next. However, you can limit your risk by managing your capital wisely, limiting the amount you trade per position, using forex trading signals, trading with greater knowledge, hedging your trades, and using specific technical strategies. Your key risk protection tool is always your stop-loss order. Remember, however, that stop-losses are not guaranteed and you can lose more than your initial deposit.
10. Be especially cautious about overextending yourself with leverage
Leverage allows you to increase the size of trade you can control with your investment capital. It magnifies your profits but it can also magnify your losses. Be sure to limit the leverage you use so you don’t get into serious financial trouble.
The bottom line
By following these 10 golden rules to forex trading, you should find yourself in a much better position over the long term. Your focus should always be on trading currency pairs that you understand, in a way that does not expose you to too much risk. Read up about market conditions likely to impact upon the currencies you’re trading, limit your leverage to an affordable amount, and use a demo trading account to understand the market dynamics.
I am getting 10% daily return on my Forex Demo account. Need Advice.
Like the title says, I am doing crazy good on my Forex demo account. I want to know is this sort of thing common and will it all completely change when I make a live account. For some background I have been only studying Forex for about 2 weeks but during those 2 weeks I have not stopped learning. I came across a strategy that is now making me 10% returns per day and I'm fairly sure I could make that number higher with more practice. Any advice with this would be much appreciated.
Im new to forex (moderate experience in crypto) and have some software development experience. Im looking to make a simple forex trading bot and have it run a while on a practice account. It looks like MT4 licences are no longer being offered and they are shifting people to MT5. As i have not used either is anyone able to outline the differences as most of the help and support for development will be for MT4.
The Ultimate Guide to Finding the Best Forex Demo Accounts For You. A Demo account is an online trading practice account which allows would-be traders to familiarise themselves with a particular trading platform and its features in a simulated environment. Forex MT4 practice account gives access to the full range of trading tools including charts, market updates and analysis, as well as technical indicators to increase prediction accuracy and trading profitability. Demo accounts have the same operational functions as real trading accounts. Therefore, when exploring the trading software, beginners Benefit from the best forex demo accounts in 2020. Forex demo accounts are one of the most important tools you can have in your trading arsenal. This is because, when you’re trading in a market as large and ever-changing as forex, you’re always in need of a space where you can gain trading experience risk-free. A demo account offers exactly Trading in a demo account happens to be an excellent way to start your Forex adventure. All you need to do is to open a demo account with one of the online brokers to take action. Trading in a forex demo account can really be useful for beginners who want to explore the website before starting a real ”game.” Open an Account with FOREX.com. FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826).
Using a Demo Account to Learn Forex Trading? Pros & Cons...
How To Download MT4 and Open Forex Demo Account Without a Broker - Duration: 35:54. Rimantas Petrauskas 9,685 views. 35:54. Secret of Demo Trading (How to Demo Trade for Success in Forex ... #forex #forexlifestyle #forextrader Want to join the A1 Trading Community? Follow along with trades taken by our top trading analysts, join our trading chatroom, and access educational content ... A Demo Account inside of MetaTrader4 is just a practice account. Using fake money but trading in the real Live markets. Follow these exact step by step instructions to set up your account for FREE! 95% Winning Forex Trading Formula - Beat The Market Maker📈 - Duration: 37:53. TRADE ATS 1,234,246 views. 37:53. 20 Habits of Highly Successful (and Wealthy) Traders - Duration: 40:13. Paper Trading is a discipline of every great traders to this day, also called as Demo trading in FOREX. Learn how the masters harness the skill set necessary to succeed in the market place without ...