What do you think about regular investments in your own Forex account?
Every month, I will have about $180 of risk capital. I have three options on what to do with the money:
[ul]
[li]Put them in a savings account with a pathetic annual return.
[/li][li]Invest them in funds. Variable risk/return and really long term 5y+ to see good returns.
[/li][li]Put them in my Forex account to increase my risk/reward $values on my trades.
[/li][/ul]
Assuming I trade profitably, the last option will give me the best possible returns for my money right?
Regardless of profitability it also gives me complete control and responsibility for my own money.
In the near future, I might be given a lump sum of risk capital, which could be anywhere from $10 to $8.000. I have the same options with this money, with the additional possibility to use it as a down payment on my students loan. The loan is really great with a less than 3% interest the next 3 years.
Additionally, every month I make regular down payments to my loan and I also invest about $90 in a retirement fund.
Answers I am expecting to this:
[I]“Learn to trade profitably with practice accounts before considering using real money.”
[/I]
No thank you. I have played poker for several years. Poker and Forex trading shares a lot of the same
psychology and require largely the same mindset. So it is my firm belief that you will never become a poker pro playing with play-money, and you will never learn to trade Forex with a practice account. (I see the value of using practice accounts for testing grounds for new strategies.)
[I]“It does not matter how much you start out with, if you are profitable, the end result is going to be the same.”[/I]
Example: If my end result is financial independence, will I not reach it faster by capitalizing on my given opportunities?
Starting out, I did the demo route…and yes, a demo account will provide you with tons of practice. But I decided to get things moving along with real money, instead of waiting to learn more. End result, a wipe out of sorts…it took me 6 mnts to get back into forex with real time and money. Now, I’m trading comfortably with tradersway…the lesson: learning may be a slow process and if you’re serious about forex, you need to have patience. Sorry if that last bit sounds corny, but it does apply to Fx trading.
I agree a practice account is not the same . But be prepared to loss some money until you perfect your trading plan . If you can afford this luxury , great .
If you can confidently say that you can achieve a better rate of risk-adjusted return than you can see in other investments, then it makes total sense to put new risk capital into your forex trading rather than elsewhere.
As with any investment, you’ll need to test the waters first…which is what I did with tradersway. Though I had all the info I needed, I still needed to hardwire my strategies before testing it out with real time money, as opposed to play dough!
Guess, it’s all boils down to "how patient are you willing to be?"
I’m not saying try demo and then micro accounts for 1 year or more. But it is a good idea to do the demo route and start small with real money, until you get good results on your trades. Even the most experienced vets will tell you that they started with demo accounts and small lots. No one’s going to want to risk the cart’n’all just on a hunch…
There is a huge difference between poker play money and forex demo… you can’t learn anything on poker because your opponents are not playing seriously, on forex the market is playing very seriously on demo as it plays on real…maybe less slippage.