Online Futures or Forex Currency Trading by a Day Trader is a very risky but at the same time a very lucrative business also. It is probably also the only business out there that has a very low start-up costs as compared to many other businesses out there.
It is also possibly the only kind of business that does not require a lot of time, employees, customer interaction or some other typical overheads associated with any other traditional business out there. Day Trading is a very lucrative business that attracts people from all sorts of other fields towards it. But it is truly a sad fact that only ten or so percent of people that are drawn towards trading finally make it in trading and move on to become full time professional traders.It all starts with the human emotion of greed in the form of easy money. People from the outside world think trading is very simple. That is because any person with a few extra investment dollars and a high speed connection to the Internet can open an online trading account with any broker and start trading just like the professional traders do. That is definitely not the case so far away from the truth. There is a lot more involved in trading than just hitting the “BUY” or “SELL” button. After all even a three year old toddler can click on a Buy or Sell button and make a trade at anytime. The outcome of such an act will be random at best. Trading is a purely psychological game where only the tough with the will to survive will become successful at it finally. That is why it is so important to start off trading in the right way.
A trader has to start day trading with real money only and not on a trading simulator. There are no other ways to get around this. The only way a trader can cut his or her teeth in this business is by trading a small account funded with real cash. That is what we call Risk Capital in the trading business. A trader should and must always only trade with money he or she can afford to lose without affecting their lifestyle. They must never put such money in their trading accounts that they might need for their immediate living needs such as food and shelter or have saved for some other purpose such as a retirement nest egg or a college education fund. They should always refrain from trading with borrowed money such as from a line of credit, a credit card or even money borrowed from a friend or relative. That is what we refer to as Scared Money in the world of trading.
It is never a good idea to learn to trade on a trading simulator. A trading simulator, offered by many online futures and forex brokers out there today, just helps cultivate bad habits in a day trader engaged in forex trading, futures trading or currency trading. Trading on a simulator does not help properly train and condition a trader mentally as it is monopoly or simply play money they are trading with and they do not care if they lose an unlimited amount of money as they know there is a never ending supply of it. Trading a small sized account with real money in it helps the trader to develop and build his or her mental skills that are so essential to succeed in trading. Using real money will help a trader approach the markets with caution and great respect towards it and only take trades that have met his or her rules as laid out in their trading business plan. This way they will be able to prepare themselves much better mentally for some unavoidable losses that are always a part of any successful business. They will also gain more confidence in their trading and themselves as they will see real money added to their trading accounts in the form of profits from their trading activity. A trader starting out with a small real money account and a great respect for the markets is setting himself up for a guaranteed success as a professional trader down the road.
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