Hi Diane! Good for you! Always understand that people will always discourage and ridicule what they themselves do not understand. There are traders I greatly respect that discourage forex trading for many reasons and I just understand that they have a different vantage point. So if you are serious about learning to trade forex, and it sounds like you are, you will have to forge on! Find those individuals that are encouraging you and keep them in your corner. Ultimately, however, you will have to gain and grown your own confidence in yourself and your own abilities to trade successfully.

Now as a beginner, I highly suggest you open a demo account with any broker just so you can begin to watch price and look at charts. You also will learn how to cultivate your own analysis and trading style on this demo account and you need to do this without the added worry of loosing all your money. All forex brokers offer demo accounts so that potential traders can test their platforms, spreads, and execution. Though this is play money, I encourage you open the demo account with an amount that mirrors the amount of capital you have to trade with when you are ready to open your live account. That way you will have a better idea of how you can actually trade in terms of leverage, lot size, and risk.

Please DO NOT rush into opening a live account. I understand that you are not working but as a newbie trader, I can guarantee that you will loose all the money in your first trading account. We all do. It is a part of the learning process so I just do not want that loss to put you out of business before you even get started. I traded for several years on demo before I was profitable in a live account.

So once you have your demo account, you will now have to figure out who you are as a trader so that you can trade your particular trading style. Learn all you can about traders psychology and the psychology of trading. Your mind and emotions will be the last hurdle to your success because that obstacle kicks in when you are trading real money. It is easier to do this now more than ever with Twitter, StockTwits, blogs, and webinars. The very best traders are willing to teach their strategies for free and a fee. Follow different traders and give each strategy a chance. As long as you remain committed, you are sure to find a trading style that completely fits you. You will know when you start to become profitable in your demo account and ready to step into live trading.

Remember this all takes time, patience, and committment. Good luck to you!

This is a great question and is something most traders, I think, struggle with. I know I do. Often it is when I am rushing into a trade or feeling too greedy. My solution is this:

I use a fixed number of lots of the same size based on the percentage of risk I am taking. That percentage is based on my ‘margin used’ so it is largely dependent on the account and lot size. I determine my risk by the margin because once you exceed a certain margin threshold, your risk is hugely out of your favor. Especially as that position moves against you. And this margin is the sum of all trades not just the ones on a certain pair. So I find that no more than 3-5 lots per pair works for my risk tolerance since I only trade 1-3 currency pairs at any given time. More than that and I find that my margin becomes too high and my trading is now too risky (and, therefore, too emotional) regardless if it is a winner or loser. Not a great position at all. Find the risk tolerance using your ‘margin used’ as a guide.

If you have a bigger lot size on your losing trades, it sounds like averaging down and greed. If you have smaller lot size on your winning trades, it sounds like hesitation and fear. Try using a fixed number of lots of the same size and DO NOT EXCEED IT no matter how well the position is doing. This also brings another level of discipline to your trading.

Good luck!

Hello Arturo!

First and foremost, I suggest trading currency pairs that you are comfortable trading. If you are comfortable trading the AUDUSD or AUDJPY, then by all means! However, if you have been trading the EURAUD and EURNZD profitably for a year, then it seems that you are very comfortable in trading those pairs. It is easy to trade when a pair is trending so don’t be discouraged by the latest trend change. In fact, both pairs have nicely reversed the long-term downtrend and the fundamentals fully support the new rallies especially in the EURNZD. Instead of fighting the new trend, embrace it! Bears will have to be more nimble.

Please note, that I do not trade any of the pairs you seek advise for. But I do know about sticking to a very select few pairs to trade. You have to be adaptable to the changing market environment. But I believe true sucess in forex trading comes when a trader is very familiar with the pairs he trades not from catching every trend available in the market.

I hope that helps put things in perspective for you in your trading. Happy trades! 

Hello Yonatan! Thank you so much for your kind words! I am really happy to hear that my articles and tweets are of value to you.

If you have been following me, then you know that I do not like to make broker recommendations. Your choice of broker completely depends on your trading style. Different styles will need different characteristics from the broker in order to be optimally successful. I believe it is up to the individual trader to make that decision.

However, with that said, I know that researching and looking for a good broker is a daunting task. So my advice to you is,

1. Figure out the criteria you need from your broker so you can be successful with your trading style.
2. Start your search with this list of brokers.
3. Check out their website. If you like the broker, download the demo and see how you trade using their platform.
4. If you like the platform, trade with that broker until you are ready to open an account.

Best of luck to you and your trading! If you want to trade as a career, keep trading and keep learning!