Have you thought about getting into trading but never found the guts to do it?
What are your greatest boundaries that prevent you from starting to trade FX?
I came across this question recently and I think it’s a great one, because in order to overcome a boundary, you first need to understand it.
Common responds include fear of losing money, fear of not understanding the market, and fear of getting scammed. Watch today’s video to see if FX trading is right for you, and how to get started.
Once you’re done watching the video, I would like to hear from you and your stories. What is your greatest fear when it comes to trading? Have you already overcome your fear? Join the conversation and share your story on our Facebook page.
Today’s Q&A Friday question is from Leonor Dias who wrote:
What do you perceive is the greatest barrier to entry for people wanting to learn about FX and becoming forex traders with no prior experience?
This is a very interesting question Leonor because it’s important to understand what’s stopping you from doing something in order to overcome that barrier and get things going. In my experience with my students, the greatest barriers have been fear of losing money, and fear of not understanding forex trading; would it be thinking it’s way too complicated for them to learn, or not being able to out-smart the big traders, or even being scammed. And all of this comes back to lack of education, because “not knowing” is scary.
Now fear of losing money is the most fundamental barrier because it’s all about money afterall. We are in it for the money, and nobody likes to lose their hard-earned cash. The important thing to remember is that the risk remains true with any kind of investing. Many Americans think that real estate is the best and safest place to invest their cash, but as it was wisely mentioned in a Washingon Post article by Catherine Rampell, such investments are no less risky than trading the online markets, if not riskier. When you invest in real estate, you are putting in a huge chunk of your money and often times that includes loans. If you lose in Real Estate, You. Are. Done! But that doesn’t prevent you from dreaming about becoming a home-owner, does it? Same can be done with trading FX. If you educate yourself the right way and are fully aware of your risk tolerance and appetite for money, you can start a calculated and fearless FX trading journey.
Another barrier is the horror stories you might have heard from people around you, who gave their money to “professional traders” or the so-called “money managers” who got their money and lost it. I was actually a victim of this years ago before I got into trading myself. As an over-achieving college student on scholarship with various sources of income on the side, I was approached by a company from Friends Provident called Cambridge Capital (and yes I’m naming names) who got me into giving them around $100,000 over time so that they will trade it for me in mutual funds, and guess what, I never saw that money again (and I most likely ever will.)
But instead of focusing on the downside of trading, I decided to take control of my hard-earned money, and learn to trade by myself. After all, no one cares about your money more than you, right?
So my recommendation is this. Get yourself educated. Get a mentor. Start trading in demo accounts or put in very small amounts to start with. Trade with your friends and bounce back ideas. Not only you will learn a new valuable skill and expand your network, you’ll be surprised how diversifying your money in different markets can increase your wealth.
