FOREX TRADING EXPENSIVE; Of course, but the real question is: “Is forex trading worth it or not?” It is not about how much money is necessary to start forex trading. The key thing you want to know about is how much money you can earn along the way.
Sure, “expensive” and “cheap” are subjective terms, but knowing how to trade Forex with $100 is a form of art.
There have been some brokers in the past who have allowed traders to open accounts with $5, but
this is no way to do business. Is forex trading expensive? Is forex trading worth it? It depends on the trader,
but does it have to be?
What Does It Look Like To Be A Forex Trader?
So, what does it look like to be a forex trader? If you’re just getting started with the business, this is one of the questions you might be asking yourself frequently.
But look, it shouldn’t be a head-knock on the wall as we’ll make it pretty easy for you to understand exactly what your work would look like.
Sounds great, right?
Let’s begin…(FOREX TRADING EXPENSIVE)
As a forex trader, you must learn how to be a great risk manager. Since huge gains can be made
overnight and lost within the same span,
you must know how to manage your trades is the best possible way to break even. With that in mind,
any miscalculation could result in enormous losses of your gains.
Does it mean forex trading is an incredibly risky venture? Absolutely not! In fact, forex trade is less
risky than other forms of currency trades. Ideally, if you spread your trade properly, you are likely to make good profits.
However, if you invest too much to make up for a string of losses in the trade, your chances of losing
your capital and finally bowing out of trade could be higher than you could imagine.
This is one of the critical aspects of your trade. At this point, you should do your homework right and identify a profitable trading strategy with a verifiable edge.
Also, it would be best if you decided on the currency to trade and the style of trade. With your trading style, you can execute your trading plan, complete with where you’ll exit, and cover for your losses.
Essentially, you’ll be entering your orders, managing your trades, and picking up your trades as per your plan. Without a profitable plan, your Forex venture is meant to fail.
Is Forex trading expensive? You might ask. To put it precisely, Forex trading isn’t such an expensive venture. But it would be best if you got started with some reasonable amount to fund your orders.
However, the minimum amount you can play on currencies will always depend on the platform on which you conduct your trades.
In addition to placing your orders and managing your trade, another critical aspect of successful Forex trading is money management.
Since you may not always be 100% sure your next order will win, managing your money can be savvy.
How can you manage your Money on Forex trade?
It’s pretty simple!
If you’re trying to invest huge chunks of money, you can get a smashing win when the trade outcomes favor you.
However, in case of a loss, a high-risk trader will always lose enormously. Since losses and wins come randomly, that’s where Forex money management comes in.
Overtrading and trading too much is a bad forex money management habit. Similarly, high-risk trading is equally a result of bad money management.
Interestingly, learning how to manage yourself is pretty straightforward and requires no special skill set to get started with.
But, it all starts with setting up your plans, practicing them, and sticking to them even when things don’t seem to be going right.
Sounds a bit tricky?
Yeah,…at times, you have to stay on course by following tough decisions.
While having a clear set goal and investment patterns might seem uneasy at first, you’ll get used
to it with time. And finally, it will become a new norm in your day-to-day forex trade.
The Best Mindset For A Successful Forex Trader
When it comes to trading mindset, you can find many books detailing all kinds of mindset to keep you on a successful course.
But, the trading mindset is of little or no value when you’re operating on a flawed strategy.
With a tried-and-tested strategy with a proven edge, the right mindset puts you right in the success
trajectory. Below are four essential mindsets that every Forex trader should have.
- Focus on long-term goals and avoid getting worried about the daily fluctuation of the market prices.
- When trading profit or losses, you should understand it’s part of the process to grow your account.
- Proper risk management can help you grow your business and last long in the tradewhichwhile failing to follow risk mitigation plans offers you the quickest way to par with your hard-earned money.
- Understand how fear and greed can negatively impact your business and learn how to control your trading habits.
By understanding these four important mindsets in the Forex trade, nothing would be a surprise.
You can jot down the four points on a piece of paper, expound on them and understand how you can implement them into your day-to-day trade.
Can You Trade And Make Profits Consistently?
When making a decision to venture into Forex trading, people find themselves with some common
questions as beginners in the world of currency trade.
Is Forex trading expensive than what I already know?
Can I lose all my investment overnight?
Will I always be sure of profits on every order that I close in?
Well, if this sounds like you, we’ve got all the answers to your troubling questions.
Just like any currency trade, consistency matters in Forex trade. When you become consistent in
your trading plan, you should enjoy the profits that come with the edge of your trading plan.
Now, will you always make profits on your orders?
Due to the uncertainty of the future trade outcomes, you’ll always make profits and sometimes take losses.
You will see your account increase and also decrease at other times. Therefore, the outcomes are not cast in stone.
You may have a losing day, weeks, and perhaps a month.
But, if you focus on the long-term goal based on your trading plan, you can always cover for the losses
in the bad days during your peak profits in the good days.
Therefore, you should have in mind that profits and losses have a random spread.
However, a good trading plan will always guarantee more profits than losses.
If you were wondering, “Is Forex trading safe” or expensive, we got your question answered.
Pros & Cons of Forex
Thanks to the miracle of modern technology, Forex is more accessible to ordinary people than it had ever been in the past. Whereas at one point in time, only major players like banks, corporations, and billionaires had access to forex markets, nowadays, anyone can get in on the action and try their luck.(FOREX TRADING EXPENSIVE)
Compared to the other types of financial markets, Forex is more stable and reliable than most.
Stocks and commodities may fetch a pretty penny, but companies can and do fail after all is said and done, whereas commodities can be quite unpredictable.
On the other hand, Forex deals with currencies, and those are much more difficult to sway or manipulate.
Forex markets also incorporate loads of technology due to their complex nature, and some
traders have even incorporated some of this technology as a part of their trading strategy.
Is forex trading worth all that precious time and nerves? Well, with automated trading, it just might be.
Sure, there are all sorts of ads for automated trading software, saying how they can make you a millionaire in
six months or something like that.
Yeah, right. If that is true, how come they have to make their own money selling their junk online to people like you?
Why are they not somewhere in the Caribbean? No, things do not work that way.
Don’t misunderstand, the idea of making forex trading worth the hassle by teaching a machine to trade on
your behalf is not exactly new – and not half bad, either.
It would eliminate human emotions such as fear or greed out of the equation and make decisions much more efficiently than any human trader.
Then again, even Forex is not for everyone. Losses are to be expected, and even the most successful forex traders have lost crippling amounts of money.
Also, many critics have drawn comparisons between Forex and gambling, and for all we know, there just might be something to all these claims.
Finally, some people just aren’t suited to all the pressure and challenges that forex markets have to offer.
These and many other reasons are what stand in the way of so many people out there, preventing them from achieving their dreams. To those people, forex trading is definitely not worth it.
Other people, however, have been known to trade successfully with as little as $100, or so the legend goes. We say legend because a story about a guy who started with $100 and became the next Bill Gates would not even make it as a science fiction novel. For one, the importance of education cannot be overstated.
How to Trade Forex With $100
In order to turn $100 into a success story, a trader would need a lot of skill, luck, and experience. Good trading strategies do not simply come to mind; they must be learned, adopted, and applied with tactical precision.
The truth behind this number is the fact that most brokers require a minimum deposit, and $100 is the most common figure out there. Is forex trading worth it on a $100 budget?
Normally, most trading strategies recommend limiting your trades to 1% of your total capital, or 10% if you are quite optimistic about things. In this case, a person with a $100 capital would be making trades that are in the $1-$10 range, so becoming the next Warren Buffet may be put on hold for quite some time.
Also, keep in mind that there will be losses. The thing that prompted so many people to wonder if forex trading was worth it was the fact that sometimes, even if you win, you lose. Are you still asking yourself is forex trading worth it?
In fact, the only way to even consider making Forex worth your while with $100 capital is to employ an extremely aggressive strategy, trading micro lots and disregarding your traditional forex wisdom.(FOREX TRADING EXPENSIVE)
This does not mean that taking $100 and turning it into $200,000 within a year is impossible, with the right kind of experience and some careful planning. So, is forex trading worth it? The $100 that you are risking, I mean? Well, if so, here is how you do it.
First of all, get some practice on a demo account, preferably with the same broker you plan to use for actual trading.
In fact, practice a lot because you will be doing real manual trading: no machines, automated software, or exotic currencies.
Focus on EUR/USD, but any other major pair should work as well. The actual strategy is very straightforward.
The first thing you want to do is split your money into two equal shares. One is for trading, and the other is basically your plan B – a way to recover from a bad trade.(FOREX TRADING EXPENSIVE)
For starters, you use $50 for trading, and the rest is your recovery money.
Normally, you are not supposed to do this, but since you are risking a small amount of money, you need an aggressive strategy in order to get ahead.
The next step is to go through the analysis of news, charts, and all sorts of predictions you can find.
Don’t worry, your predictions tend to get better as you accumulate experience.
Basically, you go through the charts and the news to figure out your next move. But you only trade when the odds are in your favor –
if the charts are not looking good, take the rest of the day off. You only trade when the market is volatile. The more up-down-then-up again action you see, the better it gets.
With some practice, the right currency pair, and under favorable circumstances, you should be right 9 times out of 10.
And on that 10th time, make sure you close your orders within a 15% loss.
Don’t worry. These are small quantities of money, and any such losses can be recovered easily.
If you do this right, your capital should double every month or so. Within 6 months, you should be trading with roughly $6,500.(FOREX TRADING EXPENSIVE)
Within a year, anything between $200-400,000 should be attainable. The $200,000 sum would account for any losses, and the $400,000 is the best-case scenario.
What Are My Exact Costs?
The exact expenses depend on a lot of things, including the broker you choose, the kind of trader you are, your trading habits and positions, and a bunch of other stuff.
Most brokers feature an automatic calculator that can help you calculate your exact expenses, so
you should have no problems in finding out is forex trading worth it or not.
As for the exact costs, they vary from broker to broker, so it is impossible to pin them down in actual numbers.
Commissions can range from 4 cents on major currency pairs for 1k lot and go as high as 6 cents on more exotic currencies or even higher.
Spreads can be 0.5 for major currency pairs or 175.00+ if you trade exotic currencies. Here is a chart with some basic expenses that should give you a clue as to what you’re getting into.
|Average spread (pips)||
|Total cost of a 1k trade||
|Total cost of a 100k trade||
|Total cost of a 1M trade||
Common Forex Trading Pitfalls And How to Avoid them for a Successful Business
Have you ever wondered why some people make it in the Forex trade business while others can hardly end up with some profit?(FOREX TRADING EXPENSIVE)
Well, the difference comes about in the knowledge one has about the trade. Yes,… the knowledge about the“Does” and the “Don’ts” in the field of Forex trading.
And that’s what makes many beginner Forex traders end up with many days of losses rather than profits.
By knowing some of the common pitfalls to avoid in the Forex business, you can avoid them and focus on major points of strength to boost your profit margins.
Below are some of the most common trading blunders that you should watch out for and avoid by all means.
Successful forex trade takes patience, effort, and self-discipline.
However, the novice views Forex trade as the shortest way to get rich quickly, forgetting the time, risk, and effort invested by individuals to achieve such lucrative gains.(FOREX TRADING EXPENSIVE)
Believe it or not, staking large sums of money in an attempt to gain overwhelming profits will likely
land you in tremendous losses as you will at one point incur a loss in the trade.
In the long run, such habits can lead to you losing all your money in the trade due to greed. Therefore, trade wisely and follow a proven trading plan while focusing on a long-term goal.
The opportunity to make trades on margin is one of the most enticing many traders. This can also be referred to as leveraged trading.
Ideally, leveraged trading allows you to invest a small amount of money and to get more profits as if you had made a nominal investment on such trades.
Since Forex involves a high degree of leverage, trading on too much leverage can land you into
serious losses that can eat into the entire investment.
Successful Forex trading requires a well-defined trading strategy. In fact, you should know when to open and close your position based on a specific system before getting into the trade.(FOREX TRADING EXPENSIVE)
Having an elaborate trading plan eliminates losses by having a stop-loss order and saving you from second-thought guessing.
Also, it’s important the markets may not work as you expected at first but later work in your favor.
Ignoring the use of Stop-loss
Forex trade dynamics can bring you losses at one point and profits in a turn of events.
However, some beginner traders hold onto their losing positions longer than necessary, hoping to recover
the gains when the markets shift in their favor.(FOREX TRADING EXPENSIVE)
Such traders tend to leave their winning positions too quickly towards locking in instant profits.
While you might be tempted to have such a mentality, it’s imperative to be patient and make perfect entries.
If the trade turns against you, you can make a wise decision to cut it quickly or run with it.
Cutting off the trade can, in some circumstances, save you from costly ventures.
Trading on Emotions
Many novice traders make a trading decision based on their emotions rather than the objectivity of the judgment.
And the result is pretty obvious! They are more likely to last in the business for a short time before diving headfirst into losses.
Long-term and profitable Forex trading requires a sound mind and focus on relevant events.
To stay on the safer side, identify your market, monitor your position, master a profitable
trading discipline, employ money management, and avoid the pitfalls we’ve discussed earlier in this article.
Is forex trading expensive, worth it or not? The answer depends on you and you alone. Between the running costs, possible profits, and all sorts of other ventures out there, there is no way anyone can decide in your stead. It all depends on whether or not you can make enough money to cover all of the expenses and prosper, or not. If so, welcome aboard. If not, good luck with your day job. Don’t quit it just yet.(FOREX TRADING EXPENSIVE)