Homemakers’ Comprehensive Guide to Trading Forex
Do you know that more and more homemakers today are buy stop .It’s no longer a secret and as a matter of fact, the number of homemakers who later become successful traders is rising fast. Despite the busy days managing everything at home, these homemakers still manage to trade Forex without abandoning their tasks and not only that, these homemakers also contribute enough to the their family financially. This story is not exaggerated at all. It’s pure reality. The good news is, believe it or not it can also be your life story.
Before you can get to their level, you must go through the whole process. Fortunately, you can choose from one of two paths-the difficult way and the wise way. The two scenarios below will help you understand the differences:
Scenario A-the difficult way
Maria is a housewife with two kids. Her husband is the backbone of the family; financially speaking. He takes home a good sum on his check every month and provided his wife and their kids all of their needs. Nonetheless, being so effective and efficient at doing her task, Maria felt that she is having too much free time around the house. As a result, she began searching for something that might be worthwhile to do and found Forex to be the suitable one for this purpose. So she started buying DVDs, home coaching, and even attended online seminars hoping that she would be able to make money consistently. Eventually she ended up spending $5,000 for the whole thing before she even started trading Forex with real account.
She diligently practiced everything that she acquired from the resources that she bought. With great discipline, she finally had the confidence to trade using a real account. Maria told her husband that she is ready to trade with real account. Her husband supported her and gave her another $6,750 to open a real account. So she started her Forex trading journey carefully and conservatively because she did not want to waste her husband’s hard earned cash. A month later, her account is already up $500 making a total of $7,250.
Her husband and children were very happy about this. The next month, she lost $75 so her total is now $7,175. The month after that, she added another $730 to her account so the new total is $7,905. So far, the money she spent as an investment is $5,000 (in terms of business, this is not classified as expense because you hope to bring more money by spending it) and the amount of money gained for three months is $1,155. All this happened in 6 months-3 months in training and honing her trading skills and 3 months in real trading. She relied on herself to do the trading and managed to do so and more importantly her husband and children are proud of her. It is indeed a great job.
Scenario B-the wise way
Jennifer is a homemaker with two little boys and a daughter. Her husband work from 9 to 5 and he never missed a chance to take additional tasks in order to impress his boss. Meanwhile, Jennifer herself is pretty busy with her three little ones. They are very active around the house and so, Jennifer doesn’t really have that much time to take a break during her hectic time. One day, her friend introduced her to online business and told her that she could make money from the convenience of her home without abandoning her kids. Moreover, her friend told her that she can do this even without any skill or knowledge. Out of curiosity, Jennifer asked them how. Her friend told her that there’s a service that can help her achieve this. Not only that, the service also comes with a learning opportunity. Jennifer spent some time to think about it and convinced herself that she can do this because even though she is busy she yearned to be able to do something to help build her children’s future and take some burden off her husband’s shoulder. So Jennifer talked about it with her husband and he handed her $6,200 because they don’t really have that much cash for this. Jennifer then setup a real Forex trading account with her $5,500 and subscribed to a trading signal service just as her friend told her.
She paid $100 for the trading signal service and she get the help of Forex professional to do the most difficult part in trading for one month. She wanted to gradually build her account and don’t want to be reckless and greedy so she traded Forex conservatively. At the end of that month, she managed to bank $520 making her balance $6,020. It’s a good start. And then she paid another $100 for the next’s month’s service. During that month she took home $300 and raises her account balance to $6,320. Not bad. She took another $100 from the $700 that she set aside to pay for trading signal services.
This time around, she added $683 and ended up with $7,003. Summing up, Jennifer set aside $700 for the purpose of paying the trading signal service and already spent $300 from it and the amount of money she added to her trading account so far is $1,503. Everything happened in a short period of 3 months and Jennifer is now getting better in her learning and soon she might be able to trade by herself and more importantly she can contribute to the family financially. Great job, Jennifer.
The moral of the story is you can do it on your own and spend a lot more time, effort and money (she needed $5,000 to prepare herself and another $6,750 to fund her real account) or you can cut the time and only prepare almost a half less money ($700 for the purpose of paying monthly subscription fees and $5,500 for the opening a live Forex trading account). Both of them aim to become a proficient Forex trader and needless to say, both of them have the same opportunity. The differences between the two paths are clear. You decide which one to choose. Now, assuming that you choose to go with the wise way, you only have to follow 3 simple steps below:
Step 1: find yourself a trusted Forex trading signal service and pay the subscription fee. This fee will grant you the ability to use their service for the next 30 days (one month).
Step 2: for the most part, you will have to wait for the trading alert to hit your email or cellphone or trading platform. Whenever good trading opportunity emerges, the service will send you a trading signal complete with entry and exit point and also stop loss level in the form of email or text message (SMS) or trade alert. This can be twice a week or even more depending on the market condition. In the mean time, you can browse the website to find trading tutorials and resources so you can learn how to become a successful trader yourself.
Step 3: once you get trading signal you need to enter the orders (open a buy or sell position and the stop loss or take profit level) exactly as written. A trading alert will include where to open a buy or sell position and also where to put a stop loss or take profit level. If the trader(s) from the service sees some changes in the market after you enter the position they will update you with another alert telling what step you need to take. Sometimes the recommendation is to exit the position or to modify your stop loss or take profit levels. This will help secure part or whole profit you have from dropping so you can maximize your profit.
Those are the only things that you need to do. To be bluntly honest, nothing is even near this level of ease and comfort in the Forex trading world. The convenience is why many people use a trading signal service. So, if you are ready to go with this path, there are several tips that can help you maximize the use of the trading signal service:
Some prerequisites before you continue…
Before you can make money or expect to do any analysis you must first familiarize yourself with the new environment. Learn as much as you can about the terms used in the industry and try to understand the basics of how the market works. You don’t have to go too deep just as long as you know how things work. Much of the information you need can be found simply by using Google and enter Forex glossary as the keywords or term.
Also, you need to familiarize yourself with the trading platform that is widely used in the Forex world. Meta Trader 4 (often abbreviated as MT4) is no doubt the most popular trading platform in Forex trading. Meta Trader 5 is already on the market but the basic function is the same and MT5 is still not widely used compared to MT4. To familiarize yourself with MT4, you can go to Alpari U.S. (or Alpari UK if you are not a U.S. resident) to register a demo account and download their MT4 platform. The familiarizing phase will usually take about two to three weeks at most.
Make sure you use the same price feed or Forex broker.
It is essential that you use the same price feed that the Forex trading signal service uses. Of course the reason is because there is no central data center that feeds Forex brokers with prices. Other trading market such as the futures market has central data feed/clearing service like CME (Chicago Mercantile Exchange) that acts as the sole price feeders to futures brokers on ES (S&P 500 futures). Thus, you will the same price for ES even though you use different broker. Unfortunately this is non-existent in the Forex market. You will definitely see different price on different broker.
The difference might vary from 1 to 5 pips and this is huge. It might not seem huge in the first time but over the time the difference will accumulate to a gigantic amount. If you are trading using a standard account (100K contract size) 1 pip is equal to $10 so 5 pips is equal to $50. Now, if you have a big account and trade 5 standard lots the amount that you will lose can be anywhere from $50 to $250 in a single trade. Suppose that you trade once a week with 5 standard lots the amount that you will lose over a period of 1 year is anywhere from $2,600 ($50×52 weeks) to $13,000 ($250×52 weeks). That’s a lot of money. This is why it’s crucial to use the same Forex broker that the service uses.
Stay close to your computer or cell phone.
This is also important. There are three main delivery methods used by Forex trading signal services: email, text message (SMS) and pop up alert via your trading platform. You can imagine what will happen when you are not near your computer or cell phone, right? Chances are you will miss a good trading opportunity or two. Also, you need to be mindful if you use a laptop or a notebook because there is a chance that your laptop will run out of battery so make sure you plug the cord. A blackout is rare but it is also good if you have a UPS. Sound is also important so you can hear any incoming email or text message. Last but not the least is to make sure to monitor the battery of your cell phone or smart phone’s.
Never doubt a trading alert.
The rule of thumb is to enter a trade when you receive a trade alert. Do not hesitate. Hesitation can lead to procrastination and procrastination can lead to missing trade opportunity. This is why the number one rule when you use a signal service is: never doubt or hesitate to enter a trade recommended to you. One thing that is clear in Forex trading is you never really know for how long a trend will last but you know for sure is the amount of risk that you can take. This is why you should treat every trading opportunity the same no matter how you feel about it. Riding the trend is only possible when you are in the market not outside the market.
Don’t try to modify a trading alert/signal.
This is the one subject often overlooked. You should never try to modify the trading signal. The signal comes from trader’s analysis and you might not understand his method of analysis and therefore, you should not attempt modifying the signal. When you receive a trading alert that recommends you to buy EUR/USD as 1.3000 it means you should buy at the exact price. Every pip is important because there are considerations behind every trading signal such as trading technique, risk levels, the currency pair’s unique behavior and current market condition. Thus, modifying any element in the trading signal will affect the trade outcome. That is why it is better to enter the trade just as recommended and leave the trade unless the trader update you with some changes due to market condition. The only time you can modify the entry or exit order is when you already understand the trader’s trading method.
How to measure the trading performance?
A good Forex trading signal service can deliver anywhere from 5% to 30% per month. Those figures are the average and therefore, the actual result will vary depending on your risk tolerance. If you are a risk taker, you might gain more but there is also a chance to lose more and if you are conservative trader, you will obviously gain less with reduced chance of losing. One thing you need to avoid is jumping from one trading signal service to another trading signal service. There is really no guarantee that the other trading signal service will perform better. High risk always equals high reward. The one thing that you should seek out in this business is consistency. It is far better to subscribe to a service that can consistently deliver 10% to 25% than to go with the one that deliver 50% this month and then -20% the next month. Remember, consistency is very precious in this business.