Im doing it, Forex Trading

[klaja26]

Ive been researching and playing all the different forex games for the last couple of weeks and after investing $2000 in fake money i made $10,000. So now ive signed up to create a real account and now im just waiting for them to verify. i signed up to a few websites so the first one that verifies me gets my business. Im going to try and turn $100 into $1mil within 1 year. Now its time for me to learn the lingo so i can talk to other forex traders.

[Twistereli]

Never really bothered digging in forex trading, eventhough i see such page at least once a day...
I think it's really interesting, but I don't know much about it and you probably need a decent amount of cash to start i guess?

[JWinvestments]

I wouldn't bank on turning $100 into $1m, that would take 1:10,000 leverage.

[bond]

Any tips for klaja26 James? Do you have experience with Forex?

[JWinvestments]

No experience with Forex other than simply following a couple of currencies because they affect stock prices (same with commodity based companies really...) e.g. US steel wants steel price high, foreign currency high (debatably).

I would say don't follow other peoples opinions on what to buy/sell though — that goes for any market.

[JWinvestments]

Actually: I would also highly recommend investing more than $100. It is mathematically difficult to make any profit from small amounts.

E.g: $90 invested in Australian$ + ($10?) initiation fee = $100

In order to break even (gain $10 to get the fee back) — you need a 10% gain, which is difficult enough — in order to make a nice return, we're talking 20%+ (doesn't come around too often)

Please tell me if this doesn't make sense.

[klaja26]

Well it does make sense but i dont work like that. I work with hopes and dreams. If i think i can do it then it may happen. Not really doing it to make a profit. Im going to blog every trade i make and see if i can double my money first. Once its doubled then i might think about investing more seperately.

[JWinvestments]

In order to double your money, you need to make a profit, so I don't see where you are coming from...

I would say $400 is the minimum amount to put into any portfolio, any less and you may as well buy 'x' amount lottery tickets.

In order to make a $10 initiation fee up with $400 we're looking at 2.5% (so anything more is income) — those are realistic figures, and markets are driven by realism, not optimism — or else you may as well put $100 into Zimbabwe and hope it becomes politically stable, strikes oil, and goes 1:1 or better with the US (in which case you'd be worth about $40m as it is currently 1:400,000)

[klaja26]

There is no $10 fee for the companies ive been looking at. No fees, only the spread.

Im all about the experiments at the moment. Not trying to make a lot of money for now. Just trying out new things. If i lose $100 then oh well. Id much prefer to lose $100 and learn a lesson then invest $1000 and learn while gambling with $1000. If i lose $100 then at least i know what not to do and if i decide to put more money into it then i know what not to do again. And if i make $1mil from $100 then ill be happy i made my goal.

Also ive been playing a couple of FX trading games and on each of them ive made profit. In 3 days ive made $20 from one of them, $15 from another and $3 on another. All started with $100. In 3 days i made 20% profit. Now if i keep getting lucky and keep putting that money back in then it grows pretty quickly.

[JWinvestments]

Here's what you will typically see advertized about Forex:

- Excellent leverage potential. Individual investors have access to leverage of 100:1 and even 200:1
- No Commissions
- Low trading costs

These are technically wrong. The spreads offered can vary pretty dramatically from broker to broker. And while it may not seem like much of a difference to be trading with a 5 pip spread vs. a 4 pip spread, it actually can add up very quickly when you multiply it out by how many trades you make and how much money you're trading. Think about it, 4 pips vs. 5 pips is a difference of 25% on your trading costs.

Also, some brokers will offer different spreads for different types of accounts. A mini account, for example, may be subject to higher spreads than a full contract account.

I wouldn't base investing money on luck, that is gambling, you get better rewards in horse racing with less risk, the markets are for calculated investments not one-in-a-mil gambles.

Finally, there is always a trading cost in any market, after all - the exchanges in their own right are businesses which want to make money, whether you are JP MorganChase & Co. or Sam the Cabby, the exchange wants money off of you.

I'm not talking about your investments going down in value, I'm talking about you losing money when they go up — it is the same as running a business, you want turnover larger than expenses — no exception.