Saker
to get back on topic.
Yes, you can do exactly what you want to do by trading Forex. The beauty of Forex is the high margin allowances, however, this is a double edged sword.
You need to prepare by trading a dummy account (www.fxcm.com) do this and then once you can trade without losing too much too quickly you can start learning by opening a real account and trying to conserve your capital for a while. If you are gifted or lucky you will make money from day one. If you are the average punter you will lose money. If you are in the 5% who are determined to learn how to do this and who will eventually consistently make money then you will know early on if this is for you.
When trading Forex stops are essential. Learn to lose money by having your stops hit. Every big loss starts as a small loss.
Why is the high margin a double edged sword? If using a mini account you can trade at 200 times your capital. Your 2000 US gives you 400 000 US of trading power. Trade to the limit and a trade goes 0.5 percent against you and you are wiped out. Doubling into losers and other poor trading techniques will bite you big time with Forex. Just because you have the margin does not mean you have to use it. If I have a bag of salt i do not put the whole bag on my meal, I use a pinch at a time. The bag lasts far longer and my meal is much more enjoyable.
So, my view. Paper trade until you have developed an understanding of the market and a trading method. I do not mean for a couple of hours in a week. I mean sit and paper trade like it was your job. Try to put in 6 hours a day 5 days a week for a couple of months at least. Learn about discipline by trading ultra small stakes with the intention of minimising losses. Start to trade with bigger stakes when you find the pot is increasing even with the small stakes.
HTH
JPWone
to get back on topic.
Yes, you can do exactly what you want to do by trading Forex. The beauty of Forex is the high margin allowances, however, this is a double edged sword.
You need to prepare by trading a dummy account (www.fxcm.com) do this and then once you can trade without losing too much too quickly you can start learning by opening a real account and trying to conserve your capital for a while. If you are gifted or lucky you will make money from day one. If you are the average punter you will lose money. If you are in the 5% who are determined to learn how to do this and who will eventually consistently make money then you will know early on if this is for you.
When trading Forex stops are essential. Learn to lose money by having your stops hit. Every big loss starts as a small loss.
Why is the high margin a double edged sword? If using a mini account you can trade at 200 times your capital. Your 2000 US gives you 400 000 US of trading power. Trade to the limit and a trade goes 0.5 percent against you and you are wiped out. Doubling into losers and other poor trading techniques will bite you big time with Forex. Just because you have the margin does not mean you have to use it. If I have a bag of salt i do not put the whole bag on my meal, I use a pinch at a time. The bag lasts far longer and my meal is much more enjoyable.
So, my view. Paper trade until you have developed an understanding of the market and a trading method. I do not mean for a couple of hours in a week. I mean sit and paper trade like it was your job. Try to put in 6 hours a day 5 days a week for a couple of months at least. Learn about discipline by trading ultra small stakes with the intention of minimising losses. Start to trade with bigger stakes when you find the pot is increasing even with the small stakes.
HTH
JPWone
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