We’re back again! This time with twenty more simple answers for very common questions related to Forex trading. If you haven’t yet read our first twenty, we invite you to check that article out! Now let’s get to it…
Q1: How many people trade forex?
A1: It is estimated that there are around 10 million traders in the world, with the number growing higher every single day.
Q2: Why do so many traders give up?
A2: Most traders walk away because they have unrealistic expectations and realize that they won’t get rich overnight or because they blow their account balance due to trading with no idea of what they’re really doing.
Q3: How much money can you make as a forex trader?
A3: This depends on a variety of factors, including the amount of money you’ve invested, your trading plan, how educated you are, how much time you have for trading, etc.
Q4: What are the best currency pairs to trade?
A4: Many traders stick with major currency pairs, while EURUSD, GBPUSD, USDJPY, USDCHF, and AUDUSD move most often. Gold (XAUUSD) is also very liquid.
Q5: Which forex pairs are the most volatile?
A5: GBPJPY, AUDJPY, and NZDJPY (currency pairs with the Japanese Yen).
Q6: Is it hard to learn how to trade?
A6: While some claim that trading is difficult, we would say it is simply more time consuming to learn everything you need to know. Those that just want to make money with little effort often walk away because they do not want to invest the time needed to learn what they need to know.
Q7: Are demo accounts rigged to convince you to open a real account?
A7: Conditions on demo accounts are not rigged. However, some traders get better results on their demo accounts because real-world emotions are not involved. Things change when real money is on the line.
Q8: What percentage of traders lose money?
A8: Every trader loses money at some point, but an estimated 20% wind up losing money when you’re talking about the big picture.
Q9: How can I limit the amount of money I lose trading?
A9: You’ll need to practice risk-management by setting a stop loss for your trades, monitoring your position sizes, etc. Also, be careful when using high leverages.
Q10: How do I know when I’m ready to open a trading account?
A10: Start by trading on a demo account and checking for consistent profits over time. You can also try taking quizzes online to test your knowledge. If you come across anything that you don’t know, be sure to look it up.
Q11: How much money do I need to start trading?
A11: This depends on the broker you’re looking at, although many brokers offer very low entry minimums of around $1-$100.
Q12: How much money does it cost to learn to trade?
A12: You can actually learn everything you need to know online for free, although you might want to participate in a paid course or spend some money for one-on-one training if you feel it is needed.
Q13: What if they decide to ban trading?
A13: While some countries don’t allow forex trading, it is highly unlikely that every single country would ever ban it. Some countries, like the USA, enforce stricter rules, but trading will never go away.
Q14: Are there benefits to trading forex full-time?
A14: Trading is considered to be a great job because you can be your own boss, work from home, and take advantage of flexible hours. However, it does require self-discipline that some may not possess.
Q15: Can I really rely on forex signals?
A15: This depends on whether the signal provider is reliable or not. Try to do research beforehand to check on the validity.
Q16: Can forex robots make me rich?
A16: Some Expert Advisors do make money for you, but none of these systems can predict the market 100% accurately. You also have to be careful considering that most providers want you to pay for their systems and be very skeptical if something is “guaranteed” to make you money.
Q17: Can the money I make trading be taxed?
A17: The answer differs based on the country you live in, so be sure to look this question up directly.
Q18: How many brokers are out there?
A18: If you’re looking at regulated brokers, you’ll find more than 200 options, while there are thousands of unregulated brokers with new options opening every day.
Q19: What’s the best forex trading platform?
A19: In our opinion, MetaTrader 4 and 5 are the best, but this doesn’t mean you shouldn’t consider other options as well.
Q20: Will trading always be available?
A20: Traders won’t have to worry about losing the opportunity to trade forex because it isn’t going anywhere – ever. You’ll be able to trade until the end of time so don’t let this stop you from opening an account.