I am often asked, “Why FOREX?”
It’s a good question. There are at least half a dozen different markets you could trade.
You’ve got stocks, stock options, equity futures, grains, metals, ETF’s, Bonds, animals (hogs, cattle, etc.). So why currencies?
There’s a number of reasons I got involved in FOREX. Many people don’t know this but originally I was an options trader. I chose options because I could trade it out of my investment account and it didn’t require huge sums of money to play.
Options however, are a quite complicated derivative to trade. You not only have to predict a stocks direction but you must also choose the right option to purchase.
Are you buying in the money puts? Out of the money calls? There are fancy options strategies like Condors and covered calls.
The entire process can be mind bending.
But that’s not really why I got out of options. The real reason was a passion for two things.
1. A love for trading. Any kind of trading.
2. A passion for economics and politics.
After leaving the Marine Corps I ended up working in Iraq and Afghanistan as a consultant for the U.S. government.
My work was dangerous but left me a lot of free time. Rather than waste it playing “Call of Duty” I studied the market, and read pretty much anything I could get my hands on.
Since the FX market is open 24 hours a day I switched from trading options to trading Forex. I read a lot about economics and was fascinated with the idea that you could make money by predicting shifts in currency value based on the economic decisions of government leaders.
I had a lot of fun during those years. And I lost a lot of money.
So, what are the main things every trader should know about FOREX? Here’s my list.
1.Fundamentals are for someone else.
Who?? Not you, that’s who. My understanding of the fundamental conditions affecting currency valuations is better than virtually anyone else on earth. I was one of the few people in 2009-10 who suggested that the European Union was in far worse shape than the U.S.
I even suggested, and still maintain that the EURO will not survive this crisis.
Even with all my resources and vast stores of facts and figures I have yet to find a way to monazite that information in my trading.
There is simply to much happening on a daily basis to affect short to mid term price.
Bottom line, if you want to be a trader stick with the technicals.
2. FOREX is Not the Answer to Your Money Problems.
If all you’ve got is 500 bucks, stick it in a money clip. Don’t put it in a trading account.
There are a lot of people out there who peddle FOREX as a quick, easy money solution to your problems. IT’S NOT.
The best traders in the world play this game. They have more money than you, access to better information, better tools, better mentors and coaches, and quite frankly they are just strait up better than you.
If you want to make money in this business it’s going to take a big commitment and a lot of time just to become mediocre much less exceptional. So if you’re thinking about throwing some money into an account to, “see how you do”. Go ahead. Just know the 10% who win rely on the 90% of people just like you who dabble in one of the most cut throat businesses on earth.
3. The industry is full of salesmen in traders cloths.
This one is going to sound odd coming from me and most people in my position would never mention it. But It’s important.
Most of the big named “guru’s” that you see selling training and/or systems are not really traders. They are professional marketers.
This is not to say there are not good traders out there. The problem is, most of them suck at marketing so you never hear about them.
One example of this is Bryan Rich who owns FXTraderProfessional.com. Bryan is the real deal. A former specialist and fund trader who traded over 600 million dollars.
(no for those of you wondering, I am not getting a kickback for endorsing Bryan. In fact he doesn’t even know I’m writing this.)
But I bet you’ve never heard of him before. That’s because Bryan sucks and promoting himself.
IF you’re looking for a coach (and I highly suggest you find one) you need to be selective. Make sure the guy teaching you actually knows what he’s talking about. And expect to pay a healthy fee for his services.
4. FOREX is the Greatest Job on Earth.
This of course is opinion but I stand by it. My job is to trade and help others make money doing the same thing. I manage a small fund and spend my day doing what I love. It is a wonderful, exciting, and rewarding carrier. But it is a carrier.
If you’re seriously interested in making this your full time job then the first step is to get committed. Make the decision right now to change your life and to make trading your profession.
Once you’ve declared it, make a list of 5 things you’re going to do starting right now that will put you on a path to your goal.
It may sound stupid but I promise you one thing, a month from now you’re going to be somewhere. Where you end up be based largely on the decisions you make right now.
Get started…
Jason Stapleton
http://www.forexmarketpreview.com
