Forex trading is a fun industry. It's exciting, people are making money, and there just seems to be a buzz everywhere. The question that most people have is how can they learn how to trade without bearing any risk. The answer is an easy one. You just need to get yourself set up with some forex practice software.
Using software to practice forex is common, everyone that trades does it(unless they've got a little bit of crazy in them). When you get started with forex, you typically look for a broker. Choosing a forex broker is a matter of preference. There are plenty of good ones out there, so it's just a matter of finding one that you feel comfortable with and that can offer you the features that you want. You can see a sample list of forex brokers here.
Once you sign up with a broker, you can open what's called a forex demo account. A demo account gives you a chance to make practice trades under real market conditions. You typically get a fictional account deposit that allows you to make fictional trades, but the market movements for your trades will be real. This gives you a pain free way to practice forex trading without risking one penny.
There are only a few things to keep in mind while learning this way.
First of all the forex broker is going to start you out with an insane fictional balance of 100k or more. Most people don't have that kind of money to trade with. It tends to encourage you to trade in a way that would otherwise be considered reckless. I've seen traders play on a demo account with big money and handle it fine, then make the switch to trading a couple hundred dollars without changing their mindset and blowing their account to pieces. The point of this is that you need to keep your risk factor in mind even when just practicing. Look at everything in terms of percentages and forget about the actual dollar amounts. It's hard to go from looking at numbers that show multiple hundred dollars of gains to making 50 cents on a big winning trade. You'll need to make that transition carefully.
The other big thing to be careful about, which is related, is the affect of forex trading psychology. Not only is it a bit misleading to give you a large amount to practice with, but when the money isn't real you don't feel the same attachment to your up and downs. You may feel a sense of achievement for making a pretend win, but the emotion for loss will not be as heavy. When your hard earned money is fluctuating in front of your eyes, it's a very different feeling.
Keeping those things in mind, you should spend time really playing with the practice software and experimenting with different methods and trading indicators. Try out everything that you have any inkling to try. It's better to give anything that might be risky a try before you lay down your hard earned cash. A fictional bankruptcy is much easier to handle a real one.
A few last pieces of advice for when you make that transition to having a live account.
Go slow in the beginning, trade for pennies at first
Keep a forex trading journal to keep track of your thought process as you make trades. Only add more money to your account if you are winning trades. If you're losing and refilling over and over, something is wrong, go back to the drawing board on the practice account.
If you feel emotional when you're trading, you need to trade smaller.
Last of all, never be afraid to call it quits for a day or two if you feel like everything keeps going wrong. It will give you a chance to clear your head and regroup.
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