When trading forex you have a certain amount of gain that you can make or lose on your trade, this is called your leverage. Different brokers give different leverages. The higher the leverage the higher the risk is of losing money but the faster you can make money. The lower the leverage the lower the risk is of losing money but it takes a bit longer to make money.
For first time traders it is usually recommended that you trade with low leverage and as you gain more experience to work your way up and increase the leverage. It is important to set a stop-loss and always check what the spread is of an instrument before trading. The spread is the difference between the buy and sell price. For a high spread you'll have to make a few pips before you can make a profit, so you basically start off with a loss. Pips are the smallest significant digit of the buying or selling price of an instrument, it is usually the fourth digit after the decimal point. A lower spread causes you to start with a lower loss thus making it "easier" to make a profit on your trade.
My days as a forex trader was short lived. If you can even call it forex trading. It started of with me opening up demo trading accounts just to get to know how forex trading works. I managed to make a nice profit but I wasn't trading with real money so the profit I made wasn't real (it still gave me a bit of satisfaction when I made a profit). Using a demo account you would take larger risks because you are not using your hard earned cash but when using your own cash the game changes slightly. I traded with different apps like trader212, meta-trader 4 and etoro.
I liked how these brokers kept me up to date by sending me emails of daily market analysis done by professionals and what is to be expected during the next couple of weeks. Then I also tried other brokers as well, but made a mistake of opening an account with easy-forex (not because of scamming or anything). A few days after opening the account (remember this was only for trading demo accounts) they gave me a call. It was a nice lady on the phone telling me about all the different options and offers they have and because I wanted to try it out, this was a done deal for me.
They offered me free training on how to use their trading platform, they even sent me a link with videos for beginner traders telling them what forex is and how it works. At first I was a bit afraid to risk my own money but I then decided to make my first transfer. I went with the lowest starting amount which was 25 USD, which is like nothing in the forex trading world. I didn't understand what they meant when they told me that the minimum amount for trading was 25 USD but I found out quickly what it had meant.
So after making my first payment my trading account was now active and I could start trading. I remember just sitting in front of the laptop starring at my account balance, not knowing how to trade. I waited for my trainer to call me and start our first lesson. The first lesson was about getting to know the platform and how to make a trade, set a stop-loss and choose trading instruments. I was so excited because I thought this was it, using my money to make money.
While being trained via cellphone the trainer told me to make a trade, I was so confused. All the YouTube videos I had watched told me that I should analyze the market before deciding to make a trade and here this guy was and he told me to make a trade without thinking about it. Luckily with easy-forex your first trade is risk free, meaning that if you lose money they will pay it back but even better if you make a profit they will double it. And feeling at ease I made my first trade. I remember my trainer telling me to look at the chart and asking me to tell him whether the currency will rise or drop, I went with drop because a previous high peak was reached and I saw a bit of resistance. But what a trader should always do is not only look at one chart but at many different time intervals of the chart. We were just looking at a 5 minute chart and I made my decision based on that. So dumb right!
Any way, I thought that the currency will drop and I started selling. My trainer then wanted me to set the stop-loss as low as possible so that I would not lose a lot more than I have. As I was busy looking at the amount of profit I was making and I didn't feel good about it, I guess that is the difference between trading real money and fake money. The profit was red and I was on the edge of hitting my stop-loss, as it turns out I lost a few dollars but got it back the following day.
Feeling the urge of just making a profit I started trading that day as well (just as I gained my money back). One thing you should never do, and this is a big no, revenge trade. I made a trade, lost money, made another trade and lost money again until eventually my account was empty. It was a bad day for me, but I still want to be a trader but not as a full-time thing maybe as a hobby on the side.
I am saving so that I can have enough money to trade again and then hopefully learning from my mistakes.
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