Most people that begin trading, have the belief that they will be able to turn a few thousand bucks into retirement money in just a few months or years. But reality is quite different. The fact is that most traders fail. Industry folklore tells us that over 90% of forex traders lose money.
Let’s shift our thought for a moment. Consider a young man that is wants to become a heart surgeon. What is the process that he will undergo before he becomes a licensed surgeon and conducts operations? Well, first of all he needs to be educated, right? In the United States, this young man will first earn an undergraduate degree at a university. Then, he will apply for medical school. After 4 years of medical school, the young man will enter into residency which will last for several more years. Once it is all said and done, the average student will take over 10 years to become a doctor.
And people are under the impression that they will be able to make a living in the market with no education from day one! The reality is that most new traders do not see the value of education. Many people believe they can read an e-book or two on the internet, and then jump straight into a live account and produce 100’s of pips a day. Education, however, is essential to long-term trading success.
How should a person go about getting educated? Well, there are a few ways to do that.
Find A Professional Trader
This is the most difficult to actually do. Professional traders are few and far between, but if you are lucky enough to actually know someone who makes a living in the market, ask them is they would be willing to mentor and teach you. Learning firsthand from a professional is an incredible experience that few people get. It can be much better than education from the best forex broker.
Find An Online Educator
This is the most common form of forex education. However, it can also be dangerous. Unfortunately, the online forex education industry is rife with failed traders and con artists. Thus, check to see if the educator or guru is willing to provide account statements with real PnL. Most are not.
There are definitely quality forex teachers and educators out there, you just have to sift through to find the good ones. Also, check to see if the teacher has any real-world experience managing funds and trading professionally. One more thing you can look into is if they have any experience with working capital which can help you get the funds you need to get started with a forex account. This can help ensure that you are learning from someone that truly knows the business.
Risk disclaimer: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite.