Forex Basics

20 (More) Quick Answers to Common Forex Trading Questions

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. 

Forex Basics

20 Quick Answers to Common Forex Trading Questions

Without a doubt, the topic of Forex trading brings with it many questions. There are questions related to strategies, brokers, fund management, and much more. Here, we’ll answer many of those questions for you in a clear and concise manner. Watch for a follow-up with additional questions and answers to come soon after!

Q1: What is forex?

A1: The term forex refers to the foreign exchange market, where traders buy and sell currency pairs in an attempt to make a profit.

Q2: How do you start trading?

A2: You’ll need to find an online broker, open a trading account, and make your first deposit.

Q3: How do you learn to trade forex?

A3: The internet is filled with resources, from articles and courses to videos, seminars, webinars, and more interactive options. Try starting with a google search for “beginner trading courses” and go from there.

Q4: What drives the price in the forex market?

A4: The price is driven by multiple factors, including economics and geopolitical factors. Central banks, politics, disasters, wars, and other news events have a huge impact on the forex market.

Q5: Isn’t trading the same as gambling?

A5: Trading is different than gambling because you’re using real information to make informed decisions about what and when to trade. It’s true that you can’t predict what the market will do with 100% certainty, but trading decisions are much more structured than gambling.

Q6: Is it legal to trade forex?

A6: In some countries, like North Korea, Israel, France, etc., trading is illegal. It is legal in the US as long as your broker is regulated and is legal in most other countries.  

Q7: Can you make money trading forex?

A7: Absolutely, so long as you know what you’re doing and you have a solid trading plan behind you. 

Q8: Do you have to be rich to get started trading forex?

A8: You can actually open a trading account with as little as $1 to $100 through some brokers. Just remember that the amount you make does depend on how much you invest.

Q9: Is trading really worth it?

A9: If you’re willing to invest your time into trading, it can be a great way to earn extra income or even to support yourself or your family, especially in retirement. 

Q10: When do the forex markets open and close? 

A10: The market opens at 00:00 GMT on Monday and closes at 00:00 GMT on Saturday. 

Q11: What pairs should you trade?

A11: This is a personal decision, although beginners might want to start with major currency pairs like EURUSD, GBPUSD, and so on. 

Q12: Do brokers scam people?

A12: Some do, but there are many trustworthy options out there. This is why it’s important to do accurate research before choosing a broker. 

Q13: What kind of people trade forex?

A13: Many forex traders are simply regular people with smartphones or laptops. You don’t have to be a billionaire investor to do it!

Q14: What is leverage?

A14: Leverage allows you to trade with much more money than what is actually in your trading account. This can help you grow your account balance quickly, but leverage is often the downfall of many beginners that don’t know how to use it safely. 

Q15: Why does trading get such a bad reputation?

A15: Many people rush into trading without proper education and lose their money quickly. This can be avoided if you educate yourself and start with a plan and realistic expectations. 

Q16: What’s the best forex broker?

A16: You’ll have to decide this for yourself but do know that more popular options tend to be safer. Try looking online for articles that outline some of the best brokers out there. 

Q17: How many trades should I make per day?

A17: As many as you want, but you’ll want to avoid overtrading. Different strategies call for a different amount of trades to be entered, so this varies widely.  

Q18: Is forex a 24-hour market?

A18: You can trade 24 hours a day from Monday up until Friday night at midnight. 

Q19: How will my broker make money?

A19: Your broker makes money by charging you commission fees and through the spreads that you pay when you make trades. 

Q20: Can trading make me rich?

A20: It can, but you’ll need to invest time and money into trading if you want to get rich. This isn’t something that can be done with no effort – but it is an achievable goal for those that are determined. 

Beginners Forex Education Forex Basics

Even More Frequently Asked Forex Trading Questions Answered!

Our previous question and answer article was so popular that we decided to add another round! What follows are some of the most popular questions (and answers, of course) as asked by novice Forex traders. Education is the key to success, so read on!

Question #1: Why is Forex a Bad Idea?

There are some statistics out there that suggest that 70% or more of first-time traders fail. Those that come across these statistics are often scared away from trading because it seems like it just isn’t worth it. In reality, many of these traders walk away over simple problems that could have been avoided, like opening a trading account with zero knowledge of the market, not using risk-management precautions, and so on. As long as you start well-prepared, you’ll be among the traders that succeed. 

Question #2: Is Forex a Good Career?

There are certainly several benefits to becoming a trader, including flexible work hours, the ability to work from home, and being your own boss, just to name a few. Of course, you would need to invest a good chunk of money to make enough profit to be able to trade full-time. Those that still need another source of income often trade part-time. 

Question #3: Is Forex Trading Difficult to Learn?

While there is a lot of information you’ll need to know before you get started trading, we wouldn’t consider it to be difficult. You will need to invest some time into learning, but the good news is that all of this can be found on the internet for free. You can also avoid strategies or indicators that seem overly complicated and stick with things you understand. 

Question #4: How Do I Start Trading Forex with $100?

If you have at least $100 to invest, you’ll find a lot of brokers that are willing to let you open an account. Some brokers even waive a deposit requirement altogether or ask for as little as $10. You’ll simply need to shop around to find an option that offers an account with a $100 (or less) deposit minimum. 

Question #5: Can a Beginner Make Money Trading Forex?

Yes, but your chances of success depend on a few factors, most importantly that you start prepared and choose a trustworthy broker. Beginners are more prone to avoidable mistakes because they simply haven’t had the chance to learn from them. One of the best things you can do to avoid this is to spend time reading articles that provide tips and tricks specifically for beginners. You can also read about common beginner mistakes to ensure that you don’t follow the same path.

Question #6: Can you Start Trading Forex with No Money? 

Sort of. You could start out with a demo account, which is like a practice account that allows you to trade without using real money. If you’re a beginner, you should start with a demo anyways while you work on saving up an initial investment. If you want to open a live account with no money, it is possible if you can find a broker offering a bonus to new traders. However, it may be difficult to find such a bonus that doesn’t require you to deposit anything at all, and these offers often come and go periodically.

Question #7: What is the Best Currency to Invest in?

This depends on the times, but currently, many traders would recommend the British pound. In particular, the GBP/USD and EUR/GBP. Of course, you’ll want to ensure that this is still a smart investment in case the recommendation goes out of date. 


Beginners Forex Education Forex Basics

Ask Yourself These 5 Questions Before Trading Forex

If you are thinking about making the jump and investing in a trading account, there are a lot of choices and a lot of decisions that you need to make. Your family, your friends, and people randomly over the internet will want to give you advice. They will want to point you in the direction of what they like and what they think is right. This can be helpful but it can also be detrimental. With so many different voices and opinions being thrown at you, it can make it hard to keep sight of what it is and the reasons as to why you want to trade in the first place. 

With this in mind, we have come up with some questions that you should be asking yourself. They will help you to really understand why it is that you are looking to trade and why you should or should not be doing it. You may not be able to answer them all or you may not be sure of the answer and that is fine. Use this as an opportunity to work them out, as this will then enable you to know whether trading forex is the right thing for you.

What is your end goal with trading?

When people look at trading, they often see the big numbers and the fortunes that could be made. If this is your end goal then you could be in for a little bit of a surprise. Things aren’t that simple and people very rarely see those larger numbers in their accounts. It is important that you have a more realistic end goal, something like being able to quit your job. This is achievable. A lot of people do it and it is certainly something worthy to aim for. Ensure that your goal is manageable and that you do not forget it, keep your eye on it to help you remain focused. People Will say that it is wrong or bad, but it is your goal, and if you believe in it, you should be able to achieve it. Just ensure that you actually have one as you are not simply trading blind, there will be times where it will be hard to motivate yourself.

How does the idea of trading make you feel?

Before thinking about this, have you actually traded before Either real or demo accounts? If you have then think about it when you were actually trading, if not, just think about how you would feel about trading with your own money. Many people like the idea of trading or the idea that they will be able to make money, but when it actually comes to trading or to actually risk some of your own money. If you feel nervous about putting your money on the line or taking a risk with it then trading may not quite be the right thing for you, or you will need to ensure that whichever strategy or trading style that you are going for suits your risk tolerance. You need to be able to accept a certain level of risk if you want to trade. Also, consider your thoughts and feelings towards learning, many people do not like to sit down and read a lot of information. If you can manage this then it’s a big plus. If you cannot then it could be a long journey ahead of you.

Do you have enough time to trade?

Trading takes time, a lot of time, if you were to think about your average week, excluding the weekends, how much time do you actually have free? You need to consider your other hobbies, your family, your social life, and of course work. 99% of people start trading as a side hobby, something to do after work or on their day off. It’s great that you are doing it alongside your work, but this will end up taking away pretty much all of your free time. There will also be some limits to what you can do, some strategies and trading styles require you to be in front of the computer for extended periods of time while others only a few minutes. So before you decide how you want to trade you will need to work out which style would better suit you.

Do you have enough capital to trade?

Trading takes money. While it has become increasingly accessible, with accounts being able to be opened from as little as $10, it does not mean that you will be able to be successful with that amount, let alone make enough to achieve the goals and targets you would have set for yourself. If you want to be successful and to use proper risk management techniques then you will need to ensure that you have enough money to support it. Your capital needs to be in line with your goals, so if you want to earn $10 a month, then a $100 account may be enough, but if you want to earn $1,000 per month then you will need at least a $10,000 account in order to do it safely. Trading can be an expensive game, and remember that any money that you put in is being put at risk, you are able to lose it all regardless of how good your money management is.

Do I have the determination and dedication for it?

Trading takes a lot of dedication and commitment to be successful. It is true that anyone can trade, anyone can enter into a trade, but it takes time and a lot of effort to fully understand why you are putting on trades and also which trades you should be taking. If you are someone that gets bored easily and likes to move onto the next thing, then trading may not be right for you. You need to go into trading with the idea and understanding that this is a long term thing, we are talking years or even a lifetime. You won’t be successful straight away, in fact, the majority of people who trade quit within the first year either due to losses or simply getting bored of it. Know that you will be here for the long haul, and if you are the sort of person with the personality that can deal with that, then it is a good start.

The start of your trading journey comes far before the first trade has been made. It comes far before you have even signed up with a broker and it has even begun before you have read your first educational article. You need to think about whether the prospect of being a trader is right for you right at the very start. If you are not sure or don’t think it is for you, there is nothing wrong with that, but you do not want to then still get involved, spend hours of your life learning and trying just to confirm that it is not right for you. Simply look for something that is instead. If you feel that it is right, then start learning, you are now embarking on a long and hard journey, but one that can reward you with pretty much everything you need to stick with it and continue to learn.

Forex Basics

Top 7 Frequently Asked Forex Trading Questions Answered

If you Google “forex trading questions”, you’ll find many different common searches from those that are curious about the field. Today, we thought we’d provide some answers to some of the most commonly asked questions about trading. 

Question #1: Can I trade forex with $10?

The short answer to this question is yes! However, there are a few things you need to know. First, you’ll have to find a broker that will allow you to open an account with this amount, but this shouldn’t be much of a problem as more and more brokers are offering entry-level accounts that don’t require a large investment. You’ll also want to have realistic expectations about how far your investment will get you. It’s true that your $10 can grow into more money, but you shouldn’t expect to become rich off of a small investment. Still, there’s nothing wrong with starting small and working your way up.

Question #2: Is it Worth Becoming a Forex Trader? 

This depends on how much time and effort you’re willing to invest in trading. Those that are looking for an easy way to get rich with little effort will probably tell you that forex trading isn’t the answer. On the other hand, if you’re determined and ready to learn, trading can be a profitable and sustainable source of income that can help you today and even into retirement. 

Question #3: How Much Do Forex Traders Make a Day?

The answer to this question is quite subjective. First, you have to consider the amount of money you’ve deposited, your overall experience, your strategy as in how often you trade, and so on. Someone with a small investment and little experience just isn’t likely to make as much as an experienced trader with a sizable investment. One common article found that a trader that makes 100 trades per month with an initial investment of $30,000 could make around $3,750 a month. While it would be difficult to replicate these results exactly, this can provide a general idea of how much you could make. 

Question #4: Is Forex Trading Just Gambling?

Not at all. When you’re gambling, you rely on things like luck and probability and you’re likely to take big risks in order to win big. Forex trading is different because you actually enter trades based on supporting evidence. Rather than simply entering trades for no reason, you work with a detailed trading plan and use mechanisms to limit the losses you could take. You can also look at things like the news and current events to have an idea of what to expect. 

Question #5: How Long Does It Take to Learn Forex?

The answer to this is subjective, as it will depend on how much time you can invest in learning per day and how fast you learn. Many traders also continue to learn lessons long after they’ve opened their trading account. If you’re eager to get started, the best thing you can do is carve out some time each day or longer blocks of time on the weekends for researching. 

Question #6: How Safe is Online Forex?

This depends on the broker you’ve chosen. While there are scammers out there, there are also many reputable brokers that want to help you. Finding a trustworthy option only requires some time researching. You can start by reading over everything on their website, including their terms & conditions, checking their regulation status, and looking online for honest user reviews on other websites. If you can’t find much information about a particular broker, go with a more popular choice. 

Question #7: Does Forex Trading Have a Monthly Fee?

This question likely stems from the inactivity fees that are charged by some brokers. These fees are typically charged in amounts anywhere from $10 to $30 or more after so many days go by without any trading activity on the account. Most brokers don’t charge this fee, but the best way to check is to read your broker’s terms & conditions and to check their website for a page related to their fees. While inactivity fees aren’t always charged, brokers do make money by increasing the spread and charging commissions.

Forex Basics

Ready to Trade Live? Ask Yourself These 5 Questions First

The transition from learning about forex trading to opening your first trading account can be an exciting one, as many beginners are eager to get started and to make money. There’s nothing wrong with being ambitious, but did you know that opening a trading account too soon is the top mistake that beginners make? If you aren’t ready, you’re likely to lose money, which isn’t reassuring in the beginning. This can even cause some traders to give up as soon as they’ve started because they assume that they just aren’t good at trading. If you think you’re ready to open a trading account, you should ask yourself these 5 questions first to be sure you’re really ready.

Question #1: How Much Do You Know About Trading?

The first thing you need to consider is how much time you spent learning about trading and how much you actually learned. Did you completely grasp each concept you read about? Your knowledge needs to go deeper than beginner material that focuses on terminology, the mechanics of trading, and explanations about what moves the market. You should have moved on to more technical aspects of trading, learned about risk-management, read about trading psychology, different strategies, and more. If you’re not sure where you stand, we’d suggest taking some online quizzes to test your knowledge. If you find that you’re getting a lot of answers wrong, write down the subjects you’re struggling with and use that as a basis for what you need to spend more time on. 

Question #2: Have You Practiced on a Demo Account?

A demo account is a great hands-on tool that allows traders to trade in a live environment without risking real money. Instead, you trade using virtual currency. There are many benefits to using a demo account, as it can help you learn to navigate a trading platform, allows you to test your knowledge, check your results, and even try out different strategies. The best news of all is that it is completely free to open one of these accounts, so there’s no reason not to use one.  

Question #3: Have You Developed Your Trading Plan?

Your trading plan has a lot to do with the whys and how’s of the way you plan to trade. Why will you enter and exit trades? What will you base those decisions on? How much do you plan on risking on each trade? What time of the day will you trade? It’s important to spend time thinking about all these factors before you open a trading plan.

Question #4: What’s Your Trading Strategy?

A trading strategy is different from a trading plan. There are a lot of strategies out there, so it’s important to consider more than one. Scalping is a good example where traders make multiple small trades per day in an attempt to profit from small price movements. Day trading involves opening one or more positions each day and closing them out before the day’s end. Swing trading is essentially the opposite of day trading and involves leaving positions open for days or even weeks at a time. Each strategy offers its own unique advantages and disadvantages.

Question #5: How Much Are You Willing to Risk?

Coming into the trading field, you might have an idea of how much money you’d like to make. However, you should also think about the amount of money you’re willing to lose. With forex trading, it’s better to limit your risk, even if that means making less profits. One large loss or a couple of medium losses could wipe out your account otherwise, so ask yourself if you’d rather lose what you’ve invested or walk away with profits. Experts recommend risking 1-2% of your account balance on a single trade, but this really comes down to your own personal preference.

Beginners Forex Education Forex Basics

Ask Yourself These Questions if You’re Not Profiting from Forex

All forex traders want to make money, but this is easier said than done. There are a lot of problems you could run into that can cause your profits to stall, so much so that it might be hard to figure out exactly what’s going wrong. If you’ve been finding yourself barely breaking even or even losing money, try asking yourself these questions to identify the problem.

Question #1: Are You Making Classic Trading Mistakes?

There are several common trading mistakes that can keep you from making money. Have you committed any of these trading sins?

  • Opening a trading account without a proper education: If you make this mistake, you might be feeling confused and don’t have a good understanding of how the market works and what or when to trade
  • Trading without a plan: If you don’t have a solid plan to follow, then your trades aren’t likely to be successful. 
  • Risking too Much: We’ll get into this more later, but you should be very thoughtful about how much you risk on each trade. Risking too much is a quick way to wipe out your account balance.
  • Being too Confident: You can’t start out with the idea that trading is a quick easy way to make money. If you aren’t prepared to put in the effort, then there’s no point trading at all. 
  • Using too much leverage: One of forex trading’s biggest perks is the ability to use leverage to increase your buying power. However, you should use it with caution. You don’t want to use your broker’s highest leverage option just because you can.

The good news is that there are simple fixes for the above problems that can get you back on track. For example, you could spend more time educating yourself, work on developing a good trading plan, and lower the leverage that you’re using. Or perhaps you should put more thought into your risk management strategy or set more realistic trading goals.

Question #2: How Much Are You Willing to Risk?

Suppose you have a $100 balance in your trading account. Thinking in dollar amounts, how much of that money are you willing to risk on a single trade? The safest answer would be around $1-2. If you’re risking amounts around $10, $20, or more, then this is likely causing you to take some big losses when the market moves against you. If you’re risking a lot, you should spend some time thinking about how much you’re actually willing to lose on a trade. 

Question #3: What’s your Trading Journal Telling you?

If you’re first thought is “what trading journal?” – this is likely a big part of your problem. How can you figure out exactly why you’re losing money if you aren’t logging your trades? A trading journal is the best tool for figuring out where things are going wrong because traders use it to log each trade in detail. Sometimes, the issues you’re suffering from might not pop right out at you but seeing consistent results in your journal can make it clear. Maybe you make bad decisions in the morning but improve in the afternoon. You might not be a morning person. Or you might realize that you simply forgot you opened a few trades each money and that if you hadn’t forgotten, you actually would have come out with a profit. A trading journal is ideal for pinpointing these problems and keeping up with how much money you’re winning or losing.  

Question #4: Is Forex Trading Really for You?

Many beginners start out with unrealistic expectations about forex trading. They might think that they can make a lot of money with little effort thanks to flashy ads that make it seem that way. Once you get started, however, you learn that there is a lot that goes into it and that it takes hard work to profit. If you’re willing to work hard and put in the effort, then you can really go far in the field, while those that just don’t want to spend time learning, working on their plan, and watching for important events might be better off without trading.

Beginners Forex Education Forex Basics

Answers to the Most Googled Forex Trading Questions

If you’ve ever used Google to seek out answers to your Forex trading questions, you’re certainly not alone. Here, you’ll find some of the most frequently asked questions that traders put to Google, as well as the answers.

Question #1: What is Forex Trading?

Traders buy and sell currencies through the foreign exchange market. Currency rates are predetermined by a variety of factors, such as political stability, government debt, news releases, and other driving factors behind that country’s economy. Traders try to capitalize off these prices essentially by selling one currency to purchase another.

Question #2: Is Forex Trading Profitable?

The answer to this question is yes, although it is subjective. Someone that makes a larger deposit is likely to make much more money and having an education and understanding of trading also helps one to make profits. In some cases, traders can lose money as well, so be sure that you’re ready before you start.

Question #3: How to Trade Forex

Once you’ve educated yourself about forex trading, you’ll need to choose a broker and make your first deposit. There are a lot of resources online that will teach you the mechanics of using a trading platform (especially the popular MT4/MT5 options). Ensure that you are familiar with the things that affect prices and other trading knowledge first. 

Question #4: What Do you Need to Trade Forex?

The good news is that it doesn’t take much to get started and essentially everyone can become a forex trader if they apply themselves. You need a device like a phone, laptop, tablet, etc., a working internet connection, a trading account, and a starting deposit of at least $5-$100. 

Question #5: Which Broker Should I Use?

There are thousands of forex brokers out there, which makes choosing the right one so much more difficult. The truth is that every trader has different needs, so what’s best for one trader may not be the right fit for another. The best thing you can do is figure out how much you want to deposit and then to compare account options with multiple brokers. Check for regulation status and read user reviews online, along with checking terms & conditions to find the broker with the best offer.

Question #6: Will Forex Trading Make me Rich?

It could. This depends once again on several factors. A well-educated trader with a solid trading strategy and plan is likely to be successful, while someone that jumps in without much knowledge isn’t likely to make it far. This isn’t something that will make you rich overnight, it does take a lot of hard work and patience to get there. You also have to invest money to make money, so don’t think of forex trading as a magic answer.

Question #7: Can you Make a Living Trading Forex?

Many people have managed to quit their jobs to become full-time day traders and the switch comes with some benefits like working from home and being your own boss. Everyone needs a different level of income to survive, so the first thing to do is to figure out how much you would have to make enough money. If you’re just beginning, it isn’t a good idea to quit your job yet, however, you should give it some time to see how well you do. You also might need to make a significant investment in order to turn enough profits.

Question #8: How Much Should I Invest?

This depends on how much money you’re trying to make and how comfortable you are with trading. You might not want to start out with a $5,000 investment just because you can. There are a lot of different minimum deposit requirements out there, some starting at just $5 and some brokers don’t require a minimum at all. You could start small and test the waters or come in with a big investment if that’s what you’re comfortable with. 

Forex Psychology

5 Questions Every Forex Trader Should Ask Themselves

Each and every Forex trader needs to not only create a trading plan and select his or her strategies but also need to prepare a money management plan, select a broker, and more. Answer these self-assessment questions to ensure that you’re on the right track.

Question #1: How Much Do I Want to Risk?

The amount of money that you’re willing to risk when trading might vary from one trade to the next, however, many professionals keep their risk percentage to 1-2% of their account balance per trade. Some might suggest basing how much you risk by looking at how much money is actually involved, although this comes down to personal preference. Risking too much can lead to a blown account balance, so be sure to give this one a lot of thought.

Question #2: Did I Choose the Right Broker?

You’ll probably form an opinion of your broker soon after opening an account. Once you need to chat with customer service about possible issues or with questions, test out the broker’s chosen platform, get a look at their fees in real action, and gain insight into any difficult policies you will either feel satisfied with your choice or feeling as if you could do better. If you think you’ve chosen a bad broker, you might want to withdraw your funds and go with another option. Of course, this is something you’ll need to seriously think about.

Question #3: Am I Really Ready to Start Trading?

If you haven’t been trading for long or haven’t started, you should definitely ask yourself whether you’re really ready. If you’ve already opened a trading account, you know whether you’re making or losing money. If you’re only considering opening one, you might not be sure if you’re ready. A few good ways to test this before risking any real money would be taking forex trading quizzes that test your knowledge or gaining hands-on practice through a demo account.  

Question #4: What Are My Goals?

Sure, making money probably seems like the biggest goal for a forex trader, but you need to start with smaller, more defined goals. Remember that it isn’t all about getting rich. For example, a noteworthy goal would be to make more money than you lose, rather than to become rich. To grow as a trader and to bring in slightly more profits each month would be another good example. If you set goals like these, you’ll feel more accomplished as you meet them. 

Question #5: Do I Have a Plan?

A trading plan is one of the first things a trader should develop because they provide a general outline of goals, risk tolerance, and a host of other things that should be taken into consideration. If you started trading without a plan, don’t worry – it’s never too late to come up with one. Still, it’s important to put this plan together as soon as possible and to actually follow it while trading, rather than forgetting about it.

Forex Psychology

Important Questions Every Forex Trader Should Ask Themselves

Becoming a successful forex trader takes a lot of hard work and determination. It’s easy to get so caught up in things that we can miss signs that we should be doing things differently. This can result in bigger problems down the road and cause us to lose money or become stuck in the same rut with zero improvements.

If you’ve already started your forex trading career, you should use our self-evaluation checklist to see if you’re making any common mistakes. Hopefully, this checklist will help to outline problems that you may not realize are hurting you. Ask yourself these questions:

  1. What tone does your inner voice take when you’re trading? Is it angry and frustrated, or relaxed and focused? If someone could hear your thoughts, what would they say to you?
  2. Is your strategy based on solid facts about the market, or do you make loose decisions that are based on thin air? Could your strategy use some improvement?
  3. Do you ever take the time to improve yourself when it comes to forex trading? Do you invest time in learning new things and perhaps practicing on a demo account, or are you stuck in your old ways? 
  4. Do you think your losses could be lowered with better risk-management precautions? Do you ever throw caution to the wind when it comes to risk-management and later regret it?
  5. Once you incur a loss, do multiple losses tend to follow? Could it be that you allow emotion to cloud your judgment when you’re down, or do you fall victim to risky tactics like revenge trading?
  6. Can you recognize when you need to take a break from trading? Have you ever continued to trade while feeling anxious or fearful, only to make bad decisions? Has a stressful life event ever caused you to become distracted while trading, resulting in losses?
  7. What is your general mood when you finish trading? Are you fulfilled and happy, or overwhelmed and stressed? 
  8. Could you possibly be addicted to the rush of trading? Are you often borrowing money from others or using money that is needed for bills and necessities to trade with?
  9. Do you make trades because they are good moves, or because you’re craving the excitement or self-esteem boost that trading can provide?
  10. What are your short-term and long-term goals? Do you think those goals are realistic or far-fetched? 
  11. Are you investing enough time into trading? Are you focusing on trading full-time, or is this just a part-time activity? Are your expectations in tune with the amount of energy you put into trading? 
  12. Do you think you have the right attitude to be a successful forex trader? When you lose, do you beat yourself up or learn from your mistakes?
  13. Do you keep a trading journal? Do you think that your strategy could be improved by taking the extra effort to document your decisions?
  14. Can you find the humor in losing and move on easily, or do you become fixated on everything you lose and allow bad days to overcome you?
  15. How focused are you when you’re trading? Are you in the zone, or are you often distracted by background noise and other thoughts? Would a quieter environment benefit you?

Answering these questions honestly can cause substantial growth in your Forex trading career. Only when one can look inward can true improvement be made.

Beginners Forex Education Forex Basics

Six Questions To Ask Yourself Before Trading Full-Time

The aim of many new traders, as well as those that have been trading for a while, is often the desire to go full-time, to be able to trade instead of working a 9-5 job, getting rid of your boss would be a dream come true. It is certainly something that is possible with trading, but there is a lot that needs to happen before you can even consider going full time, a number of questions that you need to answer before you know whether going full time is right for you. It also comes with many risks and things that you need to consider.

So let’s look at a few of the questions that you will need to ask yourself, of course, which ones you want to take notice of are up to you, and each individual will put a different weighting onto different questions, but consider them all to see whether they are actually ready to go full-time.

Are you consistently profitable?

Let’s be honest, the prospect of getting rid of your job is a strong pull to going full time, but are you currently making enough to sustain your lifestyle without a job? We have seen people jumping into full-time trading when they are just about breaking even or making a few hundred dollars each month. That is not exactly the same income that you were making with your job. So you need to consider whether what you are bringing in is enough to keep you going, if it is not, then I would strongly suggest that you wait before going full-time until you make enough to cover your entire living costs and have a little extra for yourself afterward. Quitting your job to trade and not making enough will only land you in some serious financial issues with the potential of actually losing where you live from not making enough for rent or mortgage payments.

Do you have any savings?

This kind of works along with the previous point, do you have some savings that you can use in case things do not go the right way every single month. It is vital that you have a little on the side in a savings account that you can use to help subsidize the months that you did not make enough, we would suggest that you have around 6 months worth of bill and food money available in a saving account before even considering that you are going to go full time. The last thing that you want is to go full-time and to then realize that you aren’t quite making enough and you are short of your rent this month, not having those savings available will mean you will be forced to go into debt and potentially look for another job, so ensure that you have that backup available, it will help reduce a lot of the stress that comes with trying to financially support yourself through trading.

Do you have enough trading capital?

Once again we are looking at money, so let’s imagine that you have some decent savings available, three to six months worth of your rent, but do you also have enough to trade with? There is absolutely no point going full-time if you have a trading account balance of $1,000, you are not going to be able to make enough to sustain your lifestyle. You need to ensure that you have enough money available in your trading account to allow you to make enough profit to live off. The more you have the more consistent and better risk management you are able to use. It would be far more sensible to have a trading account of $100,000 rather than $1,000, so make sure you have enough to realistically make the amount that you will need to live off.

Are you mentally prepared for trading full-time?

Trading full time can be stressful, it can be very stressful. When you trade at the moment, the only thing that you are risking is the balance in your trading account, but when you go full-time, you are risking not only that balance of that account but also where you live, in terms of the rent and being able to pay it. This adds a whole new level of stress to your trading, it can cause frustrations and it can be a very stressful and difficult situation. How do you deal with stress? How do you deal with loss? Do you easily become frustrated? If you struggle with any of these then there will certainly be times when trading full-time really puts you under pressure, and if you are not able to deal with it or work out ways to reduce them then you will surely struggle long term. So ensure that before you go full-time that you are able to deal with these emotions and feelings.

Do you have support around you?

Trading on the best days can cause a lot of stress on you, and trading is also quite a lonely experience which is not a great combination as it can lead to a number of different mental and physical illnesses. Due to trading being such a secluded activity, it is important that you have people around you that you are able to talk to, this can be people on line, family or friends, as long as there are people there that you can talk to and to vent some of your frustrations and ultimately to get a little help, especially when feeling stressed or frustrated. Simply talking to someone allows you to get that out and can often act as a distraction and a way to clear your mind, you will certainly need those times and those people to help you through your trading career.

Do you understand the risks?

There are a lot of risks when it comes to trading full-time, we have spoken about some of them above but are using this opportunity to really push the idea of how risky trading as a living actually is. There are so much pressure and risk in it, your entire livelihood is being put on the line If you do not have enough savings to sustain you through the months that are not profitable (and there will be some) then you will seriously struggle with paying for basics such as rent which could ultimately cause you to lose your home. You will also lose a lot of your social interaction, trading is a lonely job, so doing it for hours each day can isolate you from others, causing all sorts of potential mental health issues. You will be under stress and you will have financial issues if you have not planned for it properly.

So those are some of the things that you will need to think about. Going full-time is a huge thing, it is something that a lot of people aim for and dream of. However, it has such high requirements and the risks that come with it are huge, it can ultimately make or break your trading career and if things go wrong, even your current lifestyle. If you are thinking of going full time, then make sure you are ready for it and make sure that you have a backup plan ready, it is vital for your survival and to make the transition as smooth as possible, if you do decide to go full-time, then we wish you the best of luck.

Beginners Forex Education Forex Basics

Should You Be Trading Forex?

Should you trade? That is a big question, it is something that you need to ask yourself, in fact, it is something that everyone who is thinking of treading will need to ask themselves, this is for the simple reason that trading really is not for everyone, in fact, it is for the few due to the number of requirements that it requires and the stresses that it can put on you. So let’s take a look at what sort of things are required, so you can work out whether it is the right thing for you.

Do you have disposable income?

One of the main rules of trading is to never trade with money that you cannot afford to lose, so you need to be able to say yes when asking yourself whether you have disposable income. This is money that will not affect your life in a negative way should you lose it. As soon as you get into the territory where you will be missing out on things or even worse not being able to pay bills if you were to lose the money, then you need to take a step back and wait. Do NOT trade on money that you need, if you lose it, it can lead to a very dark spiral, so be sure that any money that you are willing to trade with, you can consider lost as soon as you deposit it into your broker account.

Do you have a lot of free time?

Time, something that a lot of us complain about not having enough, the unfortunate thing about trading, is that you need quite a lot of it. You need it for both learning and for actual trading. While you can make do with an hour two each day, and a lot of traders actually do. This will dramatically slow down the process of learning and developing your own plans. Trading takes a lot of time, the initial learning can be so intense that it can take a couple of hours to learn even the basics, so if you are struggling for a time through work and family life, you may struggle to pick it up. This is not to say that you cannot, just expect it to be a long process.

Can you deal with stress?

Stress, a major factor with trading and for a number of different reasons. A lot of people find it hard to deal with stress, when they are put under a lot of it they can either freeze up or the quality of their work takes a hard hit. With trading, you need to be able to deal with it, as soon as stress begins to take over, it will inevitably lead to mistakes and ultimately a loss of money. There are certain techniques that you can use to help reduce it such as taking breaks, but ultimately if you are not good at naturally dealing with it, you could find trading to have quite a negative effect on your stress levels and overall well being.

Do you like math?

The majority of people when you ask them whether they like math or not will simply state no, most people hate it. Trading has a lot of similarities with math and uses it in pretty much every aspect, working out take profit levels, how much to risk, currency changes, resistance levels, all of it requires an aspect of math, yes there are calculators for a lot of these things, but you will need to be able to get a grip on the underlying equations and statistics if you want to become successful. So if you dislike maths, there is a chase you could dislike trading too.

Do you get lonely easily?

Trading is not really a social thing, of course, there are ways that it can be, but for the majority of people it is quite a lonely experience, you will spend a lot of time by yourself looking at a computer screen, reading, learning, practicing. The only way to get a better understanding of that experience is to do it, so there can be extended times of being by yourself You can break these up by taking breaks, going out and those sorts of things, but that doesn’t change the fact that there will be a lot of lonely nights by yourself, just you and your computer screen.

Are you a rule breaker?

A lot of trading is about making rules, when you first start you will be told that you need to create a trading plan, this plan will contain a lot of rules that you will need to follow, in fact breaking any one of them will result in what is known as bad trades. If you are something that does not have the discipline to stick to the rules, then you will end up making a lot of mistakes and bad trades.

Can you control your emotions?

Are you able to control all of your emotions, we are thinking about emotions like greed or overconfidence, one is a very negative emotion of wanting more while the other is a good emotion of believing in yourself, but both can have the same devastating impact on your trading. Trading is an emotionless thing, it doesn’t care about how you feel or what you want, it cares about the money. If you let emotions get the better of you it can cause forced trades for more risk, which ultimately will lead to losses.

Do you like risk?

Trading is risky, there is no other way to mention it, there is a reason why any service that offers trading opportunities needs to note on their site that there are a lot of risks to it. There is a good chance that you could lose everything you put in, and there is a certainty that you will lose some of your trades, the majority of them when starting out will be losses. If you are afraid of this, then trading is not for you. If you are not happy with a minimum of 1 out of 3 trades being a loss, then trading is not for you.

Do you understand that it is not a get rich quick scheme?

With its rise in popularity, also comes the rise in its advertising. The majority of adverts you see these days are from brokers offering low entry limits and great leverage, or from affiliates stating how easy it is to make money, not to mention the thousands of scammers and lies out there. You need to understand that trading is not a get rich quick scheme. In fact, those that are profitable now, probably took over a year to break even. There will be losses, there will be wins, but one thing for sure, you won’t wake up rich the next day, it will take a long time to get there.

There are of course many other things that you will need to ask yourself, but these are some of the major ones., Trading is certainly not for everyone, the majority of people who start trading will quit after a month or two, either from losing the money in their account or by finding everything a little too much. It can be overwhelming, but if you found that you are able to cope with a lot of things mentioned above, then it may be something worth trying. Start with a demo account, work your way up, it is a slow and long process, but ultimately a fantastic opportunity to make changes in your life.

Beginners Forex Education Forex Basics

Top 6 Forex Questions Answered

Forex trading can be a profitable way to spend one’s free time, while some make their living by working as a full-time day trader. Although trading forex has become more popular over the years, it is still surrounded by some confusion and myths. Some wonder if you can really make money doing it, if trading is really worth it, or if the whole thing is a scam. Below, we will answer some of the most common questions that beginners ask when considering becoming a forex trader.

What Does it Mean to Trade Forex?

This one is basic but important. Forex trading involves making transactions that involve different currencies on the foreign exchange market. The currency pair EUR/USD is a recognizable example. Investors would try to determine whether the value of the euro would appreciate or depreciate in value versus the US dollar in order to try to make a profit. A person that trades forex is known as a trader. In order to trade, you need to open an account through a broker, who provides you with access to the market.

How Much Do I Need to Get Started?

Perhaps you’ve avoided trading because of the assumption that you’d need thousands of dollars to get started. Fortunately, this isn’t true. Some brokers do require larger deposits, but there are companies out there that will allow you to open an account with as little as $1-$5, or around $100. Do keep in mind that your expectations need to match the amount of your investment. You won’t make as much as a trader that has invested $20,000 if you only put $20 into your account. It’s actually better to start out small in the beginning as you perfect your strategy and improve your skills. Then you can worry about growing your investment and bringing in noteworthy profits.

Is it Really Worth it? Can I Actually Make Money?

You can absolutely make money as a forex trader. However, you need to know that trading isn’t going to make you rich in a short time span. It takes a lot of hard work and effort to become a successful trader and to bring home enough profits to support yourself, quit your job, or meet other financial goals. If you’re looking for an easy or quick way to get rich, then trading probably isn’t for you. On the other hand, if you’re willing to work for it, trading will prove to be worth it if you put in the effort.

What Do I Need to Start Trading Forex?

The good news is that you don’t need much to get started. First, you’ll need an education so that you understand basic terms and concepts related to trading, along with more advanced information like setting a stop loss or trading psychology. You can learn everything you need online for free, so there’s no excuse not to do it. Once you’re ready, the next step is to open a trading account through a broker. You’ll need to do some research to make sure you choose a trustworthy company with attractive costs. Of course, you’ll also need to make a deposit into your trading account. As we mentioned earlier, some brokers accept deposits as low as $1. You should try to make a larger investment if you can, but you can still get started with a low amount. Along with obvious necessities like a computer, phone, or tablet and internet connection, this is all you need to become a trader.

Are There Benefits to Trading Forex?

Forex trading is popular because it offers key benefits over working a real job. The best part is getting to be your own boss. You get the perks of job flexibility and you can work from anywhere with an internet connection on your PC, laptop, smartphone, or tablet. Unfortunately, there is one main disadvantage to forex trading – you aren’t guaranteed to make money. A real job offers you stability and a guaranteed paycheck for the hours you’ve worked, while forex trading may or may not be profitable on any given day. This is why many traders start out doing it part-time before quitting their jobs or making larger investments. It’s a good idea to test the waters and get an idea of your profit goals first.

How Risky is Forex Trading?

The forex market is risky. It is affected by news releases and other factors and can experience volatility at certain times of the day. However, you can make trades based on certain data, so trading offers more of a probability for winning than gambling. Nobody knows what the market is going to do, but having a good trading plan, learning to use indicators, read charts, devise a strategy, and so on will improve your odds for winning. If you’re losing money, you can always change your system and fix the issue, so trading isn’t a complete gamble. Avoiding trading during more volatile times is another helpful way to avoid taking as much risk.

Beginners Forex Education Forex Basics

Questions in Forex Trading: The Good and the Bad

People often wonder how successful traders get such good results doing forex and what they discover is often not quite satisfactory. Browsing through available sources on this topic, a great number of individuals expect straightforward answers which would guarantee immediate success. However, this may not always be possible. Many amazing forex traders out there earned their success through trial and error, attempting and failing over and over again. Do not let yourself underestimate the power of learning from making mistakes in the search for a better approach to do this type of business. Theory and practice ought to go hand in hand, completing each other to provide you with the best possible set of skills you could use in practice.

Sometimes, you will not have the opportunity to find resources you may need, which only implies that you will need to come up with a solution yourself. It often happens that we are forced to become creative in our careers, which can eventually set you apart from the competition. What is more, if you are truly seeking to become an expert earning profit from forex trading, you cannot expect to always look for second opinions. Building your integrity and independence is simply essential if you are after professional and financial stability. Nonetheless, if you are new to this and you still feel shy to experiment, do not feel anxious – just keep exploring your options, take in as much information as you can, and most importantly stay focused.

If you feel that you have consumed a great portion of available material concerning forex and you still have a few unresolved questions lingering on your mind, then this is the place where we discuss what constitutes a good question and which ones belong the opposite group. However, let us first define what good and bad means in this respect, as these could be pretty vague categories in general. Since we are talking about business mindset and trading, a question considered to be good is naturally the one that could help you prosper in this market. Also, such questions are positive because they result from constructive thinking based on either the materials read or the real need to gain a different perspective on a specific issue.

Bad questions, on the other hand, are those which can hardly get you anywhere. In most cases, these typically consist of uninventive and unimaginative questions, which have probably already been discussed extensively in various media. Of course, the good-bad ratio is not black and white as we can all sometimes overlook some piece of information or simply happen to lack relevant experience, but the general advice is to always strive to immerse yourself in all types of learning as opposed to leaving an impression of a superficial, uninterested, or unprofessional individual. So, before you let yourself ponder any longer, make sure you set your ideas, impressions, and inquiries straight and align them with your ultimate objective – the goal of being a great trader and earning a profit as a result.

If you still, however, find it difficult to distinguish the good from the bad, consider the sample of commonly-asked questions and related explanations provided below. Note the questions asked are by amateur traders and are answered by a group of professional prop traders.

Bad Questions

Is hedging as a good strategy in forex?

In the world of investment, hedging is a term that denotes the practices money managers and investors apply to lessen and control potential risks. From the practical point of view, hedging could signify going long on a particular currency while also taking up the short position on the very same currency. Although this may sound like a contradictory approach, it actually grants some secure activity to forex investors doing very long trades during sluggish periods. However, despite its practical use, hedging naturally does not apply to all individuals involved with forex due to the fact that they are traders. Furthermore, these practices are not permitted in all places of the planet, and if you do not do your research properly, you may face significant problems in the United States, for example, where hedging is officially banned. What this further implies is that not only is this approach illegal in certain areas, but there are professional traders whose achievement never depended on hedging.

The rationale behind this example is that seeking answers should be backed up by very specific research. Besides, if you ever face a term which you have to do research on, start asking questions why that is so, rather than how to utilize it. Quite naturally, people across the world can have varying experiences as they rely on different methods at times; yet, why would you want to pursue an approach which thousands of forex traders do not really need? As portrayed by this sample question, putting effort into understanding some phenomenon, deriving genuine conclusions, and recognizing the fact that some questions may simply answer themselves can be crucial – both in some situations involving risk and as skills you may wish to develop and utilize in the future.

How do you approach the topics of supply and demand in forex trading?

While supply and demand are important terms in business in general, they hold little relevance in trading currencies, which is what forex is essentially about. The prices around which trading revolves are mostly determined by the direction of the majority and the reaction of the big banks. Therefore, trading has inherently very little to do with the notion of supply and demand in terms of meaning and importance they may have in other fields, which is truly a focal point for study, especially for all traders beginning their forex careers. Why this is deemed bad lies in the fact that there is a faulty belief constituting the question. To be able to grow in the world of forex is to delve into this topic, considering its true essence and all key factors regardless of some common business terms which occasionally have little to do with the notion of trading currencies.

Is TradingView as a charting platform useful for forex trading?

Traders can get very creative while exploring viable options for improving their trading careers, yet they sometimes rush to extend their selection of useful techniques and resources without having previously studied the available advice and stories on what has already rendered success in practice. In terms of charting platforms used in forex trading, MetaTrader 4 (MT4) and MetaTrader (MT5) are often praised for having the greatest number of indicators. Of course, searching for additional tools that could help you with trading is not bad itself, but why would you limit your options to a platform offering fewer indicators? As TradingView is frequently mentioned in the comments’ section in blogs and under videos discussing forex, a few other important ideas naturally arise.

While listening on what works best for growing your finances with forex is crucial, so is your ability to analytically assess whatever you browse through. Even when something is repeatedly mentioned or suggested in various ways, you need to take an objective standpoint to analyze whether something could be useful or not. In the case of TradingView, consider how many people try forex every year and, even if only a small percentage of them inquired about this particular platform, imagine how many comments there would be after a few years. Therefore, the quality of a charting platform is not determined by popularity, or design for that matter, but by its ability to give the highest number of indicators, which would naturally give you an immediate advantage.

How can I calculate the pip value on the ATR?

The question above concerns some of the most extensively discussed topics in the world of forex trading. You only need type pip value on the ATR in your browser to get an immediate response, in addition to numerous blogs, videos, and posts elaborating on this at length. While the search for the answer to this question does pinpoint to a degree of carelessness on the behalf of the inquirer, there may be some other reasons behind failing to understand something so widely discussed across various media channels. For example, a portion of traders may find the difference between yen and non-yen pairs quite challenging to figure out, but thankfully, there is always a way to get around this issue. As with trading with real money, demo trading can also give you some invaluable insights, especially when you fear that your lack of knowledge could hinder your growth.

After doing some very simple math, which you could first look up online, you can actually understand what an ATR value is indicating and use this knowledge to make a real profit. Consequently, traders have different ways to gather information at their disposal nowadays, and owing to practical tools, both those with and those without experience can now see whether the previously acquired information applies in reality. What we should never do, however, is expect to make a profit without at least putting some effort into research, which this question clearly signals.

How can I find a volume indicator?

Even though we may come across various questions which can vary in many ways, some questions are not really aimed at looking for answers the way we think. Some traders can get extremely anxious hoping to become successful in trading that they fail to acknowledge the importance of a learning process. Some other traders may, however, have ulterior motives, where they are not, in all honesty, asking for assistance to learn, but trying to win specific information which would save them time and effort. Although this is not illegal or forbidden, it does raise a few questions regarding integrity. Not only are there already numerous information pointing to obvious conclusions, asking someone to do your part of the job is not a way for anyone to start their own success story. This entire paragraph can boil down to this one key advice – learning is a process that undoubtedly takes time and energy, but it also pays off in time. The materials on forex trading which you may come across are not meant to prolong this period, but save you from having to learn the hard way. If you are truly intent on pursuing a forex trading career, be ready to patiently devote a section of your life without looking for shortcuts.

Good Questions

Can you recommend a broker?

Asking for a recommendation is always a good option because you can get some honest and clear response to your inquiry. Different video makers and blog/post writers sometimes comment on other people’s work, but what traders need to bear in mind when looking these up is that such recommendations can be affected by several factors. Depending on the degree of professionalism and knowledge, the recommendation you are receiving can be heavily reliant on personal opinions and potential deals between the involved parties, among others. Moreover, the recommendation may not involve actual money, which only proves how testing someone’s knowledge or skills did not take place before giving them a recommendation.

The traders’ task, as always, is to test whatever they see, comparing and contrasting the information they are presented with, so as to limit the damage as much as possible. As your knowledge and experience build-up, you will learn to spot the weak points and identify what is valuable in whatever source you turn to. That is why expansion to other markets outside the local one could be extremely beneficial – the more information and practical knowledge you possess, the faster you can profit from trading, especially if you start dealing with other assets, such as metals for example.

Would you recommend the use of divergence in trading?

If your prices are heading the other direction from the indicator, which is called divergence, you could gain some very useful information on the current trends. Divergence can be either positive or negative depending on the way a price is oscillating and, although it does signal some unusual activity, not all professional traders rely on this tool to determine how the prices will move. While thinking about trends and the interest foci is relevant, you can simply run a test trade with your demo trading account and see whether divergence could be of help to you in assessing a price’s momentum.
Would you consider automation or expert advisor (EA) based on a specific trading style?

With automation and EA available in the world of forex trading, the thought of having such a product custom made according to a successful system would definitely have its advantages – from simplifying trading to alleviating the difficulty of the challenges which traders face daily, to list a few. Nonetheless, automated trading can have its drawbacks unless properly designed; for example, news avoidance is said to be crucial because of its potential impact on the outcome of a specific trade. Although the existence of an automated product designed specifically for forex trading is not a matter of question or speculation, every trader at the beginning of their career should learn as much as possible before placing all their faith in a program without having learned how to be independent first.

If a received a signal to go short on GBP/CAD currency pair and another signal to long on the AUD/CAD one, should I opt for the first one?

If we compare the two currency pairs, we could see how the Canadian dollar is the one neutral currency among the three. The person who proposed this question probably assumed that the British pound is going to be weak because they received a signal to go short on the GBP/CAD. In addition, they could conclude that the Australian dollar is going to be strong since they received the long signal on the AUD/CAD. Based on these pieces of information offered by the system, they may be wondering if the best option would be to trade the strongest currency against the weakest one, going short on the GBP/CAD. While this may be inviting, the best advice here would be to do the two trades signaled by the system, without any alterations or deviations. What is more, going long on the AUD/CAD and going short on the GBP/CAD is in fact similar to going short on the GBP/CAD, which resembles a hedge to your advantage. Therefore, following the system’s indicators without overexposing to one currency is a secure way to enjoy trading currencies.

With such a great number of RSIs, should I test them all?

Despite the number of RSIs (the relative strength index), any professional trader would advise you to test all existing variations. Testing allows traders to learn how a tool or an approach works in real life, and many of the indicators discussed and used nowadays are in fact derivatives of the previous versions. Do not get uncomfortable testing an older RSI variation which has not been used for a while because any experience with a particular indicator could provide you with information you could use some time soon. Such versions may not serve the market of today, but with some adaptations, they can serve even present-day needs despite the fact that they were designed a few decades ago.

In the choice of good and bad questions, the focus was always placed upon a few important areas of concern. Browsing through materials discussing forex trading from the perspective of useful tools and strategies used in practice before is the one step every trader should do. This approach is supposed to prevent you from walking in the dark and needing to learn from your own failures. However, do not judge the age or the popularity of the materials, methods, or tools you come across, but run a demo trade and test how these work in reality. Furthermore, if you compare the good and the bad questions provided above, you will see that one of the main differences in the level of knowledge the inquirer possesses. If you are determined to make forex your career, then you cannot allow yourself to lack basic information.

Nevertheless, cramming theory is counterproductive, causing equal damage to the person who did not take time to assess various pieces of information they have gathered on this topic. Any development includes the necessary analysis stage, so by offering you the examples above, the text aimed to point out the differences between the questions which result from deep thinking about the acquired knowledge and the ones stemming from the lack of facts or original thoughts and insights. If you are a diligent and hard-working person, you will surely push against all limitations coming your way and, truth be told, this systematic approach is the only one that will help you succeed.

Sometimes you may feel that a particular question is blocking your progress, while it may not be the case in reality. Surely, the more self-reliant and independent you become, the faster you can prosper, and the best gift you can give yourself is honoring this process. Looking for information, searching for answers, reading, and watching everything and anything you can find on this topic, as well as applying analytical skills will allow you to get there faster than traders were able to a few years back. If you do want to become more involved in community discussions, as an avid reader and a conscious thinker, you are at a much better position of getting the questions right, thus gaining the opportunity to make a real difference while trading.

While blogs and video makers are eager to answer each of their follower’s questions, show respect by avoiding asking boldly for clues which should be your responsibility only. Such attempts at finding shortcuts reveal a mindset very different from the one prerequisite to forex trading, which naturally requires patience and focus. If you continually get proof that forex is not the best choice for earning money for you, there are plenty of other options you could choose, such as stock market trade. Whatever you do, hence, should involve clear thinking and asking the right questions. There’s no such thing as a stupid question, but consider what your choice of question is saying about you as a forex trader.