Is it possible to make money with Forex? (part 2)

Posted on Oct 28th, 2010 in Forex Trading for Beginners

Question 2: How much time to spend online to make money with Forex?

Forex traders who have a high level skill in the field of technical analysis can afford to make several transactions every day, earning up to 300 points a day. At first it seems that the only way to, but this form of work on the Forex can be compared with the acrobatic performances of figure skaters or gymnasts. For professional athletes, such activities are the daily routine, but for the untrained person they may end fatally. In forex trading, a situation is like that.

It is much safer to enter the market only at the points most predictable movement of the market: the points of intersection of long-term and medium-channels, strong support or resistance levels, etc. Such situations are formed from several times a week to several times a month, however, this is quite enough to get a small but steady forex profit. There is no need to constantly be at the computer, tracking the slightest fluctuations.

Question 3: Can I live from the Forex profits?

This question can be rephrased: Is there a job with a good salary? Yes, there is, but to rise to the level of good salaries, need some time to work in the company in order to get to the core business. In the questions about forex profit the situation is very common. If you expect to earn money on Forex every month, it means that you are in a deep illusion. The sooner you get out of it, the cheaper it will cost. In my opinion, in order to get closer to the profits should go through several stages:

• Need to learn basics of the Forex technical analysis.
• Should be able to feel the danger and know when absolutely unwise to enter the market.
• Need the ability to find entry points into the market with a minimal risk. To pass these three stages is quite suitable demo account with virtual money. This will form its own forex strategy, identify its weaknesses and relate to the virtual deposit with the same respect as a small real.
• You need to change some of the quality of his character and create new ones. Improve trading forex strategy. At this stage, will need a small live account. I think that for these purposes would be the best deposit equal to 30% – 50% of your salary. Such an amount enough to treat your deposit very seriously, and at the same time, such a small amount can feel quite comfortable, except for panic at the slightest market move against you. Strongly not recommended to open a deposit on borrow money, hoping to quickly double the deposit and pay debt. For myself I know: a psychological pressure to withstand almost impossible. Moreover, if you do not have sufficient money to open a deposit, this means that life itself, Fate does not want you to do so. Who wants to go against their own destiny? This is not courage but stupidity.
• Need to gain experience. The experience not only to successfully find a good entry and exit points, but also correct mistakes with minimal losses or small profits. Besides, sometimes there are situations when the mind sees intuitively familiar model (pattern) of the market and accurately make the right decisions, even without a deep technical analysis of the situation.
• You must have a sufficiently large deposit. At the initial stage of work on the Forex double small deposit is possible. If the expected market movement of 100 points corresponds to the returns of 20% of the initial deposit, you will need only 500 points of profitable trades to double your account.

This situation is extremely popular as the cost of a lot closer to the bag, which corresponds to 20% of a small deposit. From an economic and mathematical point of view this state of affairs connected with the super-risk (and super-profits), but it is quite possible, if the deposit does not exceed the size of a salary. If we are talking about a more substantial amount, then the entrance to the market an amount which exceeds 10%, is deadly for the deposit, but in the long run, is likely to lead to disaster.

Thus, the Forex profit at the optimum ratio of profit and risk is 10% – 15% per month. of the deposit.

However, if you get to the sixth stage of the work on the Forex, then problems with the size of the deposit will not be. The world is full of wealthy people who want to increase their capital. If you really master the profession of currency trader, you will not remain unnoticed. Trader is a high-level segment will be one of the most sought after professionals in the labor market as long as long as there floating exchange rates.