How to Gain Valuable Forex Experience

The foreign currency exchange, or Forex, is a dynamic and extremely viable alternative to the current state of the stock market which is now available to anyone with a credit card and internet connection. Although trading on the Forex is in many ways easier to follow than trading on the stock market, you still need to know what you're doing and you still need to practice on a real account with real money. Read this article for ways to gain that valuable knowledge and experience without losing your shirt or risking the rent money. Best of Luck!

Instructions

Things You'll Need:

• credit card
• good internet connection (you can get away with a good wireless connection)
• patience

1. Step 1

   EDUCATE YOURSELF: The first thing you need to do (and I can't stress this enough) is to fully understand exactly what the foreign currency exchange is and how to trade on it. It's not exactly like the stock market and typically follows its own set of rules. What causes the stock market to fluctuate doesn't necessarily do the same for the Forex. Go to www.babypips.com for a complete, web-based, course that will teach you all of the in's and out's of the foreign exchange. The good news is that it's 100% free of charge! The bad news is that it's very extensive and therefore very long. But you can rest assured that, upon completing the course, you will fully understand how to trade currency for profit. And that's not an exaggeration!

2. Step 2

   DEVELOP YOUR SKILLS: Unlike learning how to trade on the stock market, most Forex brokerages will give you a free practice account to experiment with using none of your own money. Go to either www.fxcm.com or www.forex.com for an excellent, hands-on demo trading account where you'll get to trade using the exact same platform and spreads used by those with real accounts. You will need to download the trading platform offered, but this is also 100% free of charge.

3. Step 3

   TAKE THE PLUNGE: Once you feel comfortable trading the Forex with your free account, it's time to apply for an actual account. However, instead of applying for a standard or mini lot account (these usually require anywhere between $200 and $500 initial deposits), apply for what's called a micro lot account. Do your own research if you like, but most micro lots require between $10 and $100 initial deposit to start. Go to www.forexmicrolot.com for FXCM's micro lot version. They'll even give you a micro lot demo account to try out first. FXCM micro requires only $25 to start, once you're approved. And you can make that deposit with a credit card! Micro lots allow you to trade nickles and dimes, so you're not going to risk a whole lot of money and you get to see how the Forex works. For example, in order to lose that initial $25 with FXCM, you'll have to make an extremely stupid trade that you end up holding onto for days. That's not the case with standard or mini lots where you can lose your entire deposit in minutes.

4. Step 4

   KEEP LEARNING: Once you're all set, keep up on the latest Forex indicators at www.dailyfx.com. These traders make a living off of trading. You don't necessarily have to follow there advice, but since they're analyzing technical and fundamental indicators all day long, it's a good idea to at least take their information into consideration. Have Fun!

Tips & Warnings

• Micro lots are excellent for those wanting a larger account, but are having trouble setting aside the large initial deposit. Deposit the minimum amount into your micro lot every now and then, doing some trading here and there, and once you have the initial deposit needed for a standard or mini account, withdraw the cash and transfer it.
• Of course, you will probably lose some money, but it's a little more difficult to lose substantially with a micro account. You'll probably see what's going on before you end up losing your lunch money and exit the trade (we are, after all, dealing with nickels and dimes). It's best to make a single trade per day or week to keep your trading account totals intact so you can trade another day. In other words, don't over trade! Shoot for about $100 extra per month with a micro account.