Online Forex Trading Can Make You Rich, But Watch Out

Foreign currency exchange trading (Forex Trading) is creating a lot of buzz in investment circles, because it's making many people very wealthy. Unlike the New York Stock Exchange, the forex trading market is open twenty-four hours a day. You can literally trade from sun up to sun down in the forex market.

The reason why so many people want to learn how to trade forex is because they hear stories about average folks, who have become forex traders, putting some money into a few good trades and making themselves a bundle - we're talking thousands of dollars.

Is this kind of success in currency trading possible for you?

Yes, and no.

Yes, it is absolutely possible for you to learn how to analyze the forex market and pick winning trades. However, this success will not come overnight and will not come without some study and practice on your part.

Was that a buzz kill?

I hope not. It's just a little cold water being splashed in your face. Look, online forex trading can be a little like gambling in Vegas. You've got your cash on hand, you're sitting there at your computer looking at all the forex charts and currencies: dollar, yen, euro, etc.

You're just itching to make some trades and even though you're still green under the gills, you're ready to jump in on that hot tip you got from your fellow forex trading buddy. The rent money's due and you've got bills to pay, but you just know that if you make this one trade - you'll make big bank!

Okay, this is where the excited new forex traders get happy, go all in and then . . . lose lots of money they can't afford.

That's right. While experienced forex traders are making nice profits on that hot tip, the newbies are getting wiped out clean, because they really don't know what they're doing and are betting their hard earned cash based on pure emotions. The first thing you need to learn about trading currencies is that you should NEVER make a trade like a gambler sitting at a roulette table letting it all ride on red.

The best forex traders are the ones that know how to keep their cool.

The best forex traders also learn how to read the forex news and analyze what trades they think are best given certain market conditions. Another golden tip is that you should never invest money that you need to keep a roof over your head, food in the fridge and the lights on at home. People who do this are gamblers and we already know that gamblers lose most of the time.

Successful forex traders have learned to risk no more than 2-3% of their total forex trading account. So, while they may make thousands, these investors have learned how to build on their success. When you have a winning trade, you take that money and invest it again and again.

To be safe, while you are learning how to trade in the forex market, you shouldn't use real money period. You can open a demo forex trading account and make your trades without risking a cent. This way, when you lose, you can study that mistake and try to correct it. While all investors, even successful ones, lose money, you'll be learning how to minimize your losses and increase your winning trades.

A good online forex trading system will show you the ropes and teach you how to look at trends and study market movement. You'll also learn how to put in a strategic stop loss to keep you from losing too much money when the forex market goes against you.

When the time is right, and you are confident you can trade successfully (with a cool head) using real money, then jump in and go for the gusto