Make A Living Online: Is Forex Trading The Answer? - By: Michael A Jones

"How can I make a living online?" That's a good question. Working from home has many advantages.

One popular opportunity is currency trading, or as it is commonly known, the Forex (Foreign Exchange).

This could be your answer if you are deliberating about trying to make a living online or alternatively get another source of revenue to pay bills?

This article is intended to give you a realistic appraisal and identify two critical factors you need to consider before getting your feet wet!

Does the Forex make money? A resounding yes. The daily turnover by some estimates is around $1.8 trillion. Anyone with a computer and internet connection can go online and participate in the marketplace.

According to other estimates however, the majority, perhaps as high as 95%, lose money and blow their account within the first 2 or 3 months.

Is making a living online through the Forex just a pipedream then? No, thousands are. There are so many advantages! With the convenience of working at home, you can create a steady income stream that continues to grow and grow, once you've got the necessary skills under your belt. However, you need a realistic approach.

First realize you are going to have to do your homework, get a good education, and then spend months developing the mental disciplines necessary for online trading.

The Biggest Mistake To Avoid

D0N'T, repeat, DON'T, signup with an online broker and sink thousands of dollars into your account thinking you will make a killing. You will ended up getting slaughtered, almost guaranteed. And if you are currently out of work you have even added reason to proceed very, very cautiously.

At one seminar I attended I overheard one participant casually stating he opened his first account with $15,000. That disappeared within a few months and he was contemplating re-funding the account with the same amount. You may not have anywhere near $15,000 at present, but even $1,000 is too much for a novice.

Here is my recommendation so you can test the waters without losing your shirt!

A Simple Plan

Research online and get FREE information on how to trade the Forex. There is no shortage of educational materials. Fire up Google and put "Forex tutorials" or something similar in the search field and start researching.

Then open a demo account (which won't cost you anything) at a popular broker and start getting used to the trading platform.

After practicing for a short while, find a broker that allows you to trade micro lots in a mini trading account.

I am not an affiliate of this company so I am not promoting them for any personal advantage but I do have an account with FXSolutions and find they are as good as any, and you have the option of trading at the 10 cent (micro) level. At time of writing, the minimum initial deposit is $250. Regard it as money you don't need. That will be the maximum you will risk.

Some may recommend paper trading in a demo account for months or even years. So why do I recommend trading live as soon as possible? Because from experience, I have found there is a huge mental shift when you start trading live, even if each pip is only worth 10 cents.

Trading in a demo account can tempt a person to be like a gunslinger, shooting at every trading possibility they see. It can be very difficult to maintain a strict mental discipline when you are just trading paper money. But with live trading, even at 10 cents per pip, you tend to take things much more seriously.

Also at the 10 cent entry level, you have a very large room for error. With reasonable risk perimeters, you would need to have a successive run of over 50 losing trades to blow your account. The chances are, long before you reach that stage, you would gain experience in risk management and mental discipline and take only high probability trades.

You might think, "at 10 cents a time it is going to take a very long time to make serious money." You will be surprised! Start off cautiously, and once you have mastered the necessary skills and compounding kicks in, your account can start to grow at an amazingly fast rate.

There are two critical factors if you are to succeed with the Forex and make a living online. Did you spot them from the preceding paragraphs?

Critical Factor No. 1 is: Get a good education!

Critical Factor No. 2 is: When it comes to distributing your time, developing mental disciplines and studying risk management should take the lion's share rather than looking for the ever elusive perfect trading system.

Getting a trading system that makes money is not a problem. There are scores of trading systems out there on the internet you can purchase for one or two hundred dollars or less. Choose one that fits your available time and pocketbook.

Once you have a trading system, you need to develop the discipline to stick to it and not be swayed by emotion. Additionally, you MUST operate within strict risk management levels or your account will disappear pretty quickly.

Now, if all that sounds daunting it is with good reason. If you are currently looking to make a living online, you need to be cautious when considering Forex trading. Many brokers and systems promise easy money. Don't be fooled.

If however, you want to investigate a little further and see if it is for you, why not try the step by step plan outlined above and make a decision. Forex trading could well be the answer you are looking for in securing employment by making a living online.

Copyright (c) 2009 Michael A Jones

About the Author

Michael A. Jones has spent a long time in the the trenches learning the Forex. He has some honest observations on his web site: RealisticForex.com. Of particular interest is his recommendation on how to trade the Forex on just minutes a day. Check it here: http://www.realisticforex.com/forex-on-minutes-a-day.html

Article Directory Source: http://www.articlerich.com/profile/Michael-A-Jones/48521

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