Wednesday, December 03, 2008

Use a game account if you want to learn forex trading

I got a pm from a friend asking me what is the best way to learn forex trading – so I am posting my experience, not to discourage him, but to tell him (and you) how I learned forex trading.

Many years ago, I was working in KSA. In KSA you cannot go to movies, bar, etc. and so I strived to maintain my sanity there and so out of boredom, I stumbled upon Oanda, an online forex trading company on the internet. I opened a game account; and I tried learning how to trade forex, and how to use strategies through the internet. I got addicted trading forex – it felt like I was in a casino betting on yen or euro against the dollar.

After a few months of game account forex trading, I knew what a cable was and other forex currency, what are pips and the pros and cons of leverage (my advice from experience: never use a leverage that is more than 1:20) ; and why yen is the carry trade, and how interest rates affect forex trading. I learned strategies, my favorite, and most useful: Fibonacci. More methods and strategies are out there on the web.

What is great with a game account is that you can test your knowledge, fear, and possible losses or gains, before you jump to real money trading. So, how was it? It took me a lot of downloaded ebooks, a lot of game accounts, a lot of forum posting and questions, a lot of testing various forex trading software, etc. Learning forex trading requires time (a lot of it), because in many cases, only the best, the most disciplined, not so greedy forex day traders are left standing to trade another day. Believe me, because I have been there and I have been margin called a lot of times.

One experience I will never forget was around 4 years ago (hehehe, yes I have been with trading forex for years), and I traded long Ag (silver), and yes you can trade gold and silver. I was up a few hundred pips, and I turned off my computer to eat dinner and after dinner when I checked my forex trading account – I got margin called. Silver drop like I have never seen before. Another was a long trade on yen, I made a post about it here.

All I am saying is use a game account for as long as it takes before you jump to real money forex trading. If you cannot be profitable in your online forex trading game account after a few months or even years – then never trade forex.

Yes, there is money on forex trading – provided you know what you are doing.