Whether you are an experienced trader or a complete novice, if someone came up to you and asked you what the most important factor of being able to trade effectively was, what would you say? Money, perhaps? Or how about the most up-to-date computer you can buy with a fast and reliable broadband internet connection? You might even say a good quality broker who runs a popular, well-supported platform such as Metatrader.
The real answer?
There is no doubt in anyone’s eyes that money, reliable internet and a good broker are paramount to the success of any trader, but without experience, you will struggle to get yourself off the ground, never mind earning a respectable residual income.
The problem that most novice (and even relatively experienced) traders have in respect of ongoing education in foreign exchange trading is that they believe training and learning is only needed until you begin to make a profit on trades on a continuous basis. There is a general belief amongst the Forex community that before you start live trading, you have to have been earning a profit by trading in a demo account from a broker for at least 3 months. Once this 3 month period is up and profit is shown in each month do most believe that the new trader has what it takes to be able to trade with a live account without losing any substantial sums of money.
Putting it in that context, it is not difficult to see why most people do not continue with their Forex trading education. Having to wait 12 weeks (which is the minimum figure – remember, this is 12 weeks showing a profit and it may take many months before a trader even begins to make profits regularly on a daily basis) can seem like a lifetime and is no different to when pupils leave Secondary school after completing their final year. Do they spend the next few months studying? Hardly. It’s more festivals and late nights than text books and early mornings throughout the summer.
Unfortunately, just because resting usually follows a lot of intense learning does not make it right and in respect of Forex, as the market is so volatile, it is important to stay on top of current trends, meaning regular updates are necessary.
It can be difficult to pinpoint exactly what makes a foreign exchange trader a successful and popular one. Whilst their financial results will very often speak for themselves and looking at the amount of profit that they have made in a week can be a good way of determining how successful they are, a novice trader who has only signed up to a broker and downloaded Metatrader recently could be just as successful, showing a better return on their investment, but on a lower scale to their more experienced colleague. Although this may be the case and determining how successful a trader is can be difficult, all successful traders have one thing in common – they have copious amounts of experience and continue to develop their knowledge on a regular and on-going basis.