Answer
You're going to have to be more specific. What's the most important thing about building a house? We could go on forever.

The most important thing people tend to overlook is the use of leverage. I don't know of any other market with 200:1 leverage.

Trading stocks on margin at 2:1 leverage is considered risky, and stock index futures at 20:1 is extremely risky. How much trouble can you get into with 200:1 trading currencies?

Just because you can, doesn't mean you should trade with huge leverage. Depositing $100,000 and trading one contract would be no leverage, or $10,000 and one mini contract.

Trade the simulator first, and when you start making virtual money, then risk you own.

Forex simulator:
http://www.expertworx.com/pm/Forex%20Market%20Educational%20Game.htm

http://www.premieretradeai.com/

http://www.forextv.com/FT/Video.jsp?channel=41

http://umgarticles.atspace.com/forex-trading.htm

http://www.fxstreet.com/rates-charts/usdollar-index/

http://forex.tradingcharts.com/

http://www.dailyfx.com

http://www.forexbastards.com

http://www.forex-options.com/

http://4xcampus.com/

Here is the broker I use:
http://fxdd.com/

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Learn By Hands On Forex Trading: Demo Accounts Vs Mini Accounts

By Amber Lowery

If you are new to Forex, you are likely overwhelmed by the sheer amount of information you are finding about currency trading. Although the concept of trading the currency markets is simple to understand, the actual trading methodologies and understanding of how, why and when trades are executed can be hard concepts to grasp and fully understand. If you aren't aware by now, forex trading is not without substantial risks.

There are several schools of thought on how a new trader should progress from learning to actual live trading. In this article we will discuss the best ways for a new trader to learn how to trade the forex and make their first live trades.

To start out, I can not stress enough the need for hands on trading. This is why you will often hear it recommended that new traders start trading with a demo account. What is a demo account? Many online forex brokers offer something known as a "demo account" which is a fake account that you can trade until you feel comfortable trading your own funds. Demo accounts behave just like real accounts, the only difference is that the money you are trading is not real and no actual trades are ever executed.

The purpose of using a demo account if you are new to Forex trading is to get you comfortable making trades and to help you become familiar with the brokers trading platform. You can cut your proverbial teeth so to speak without risking any of your own funds. This makes demo accounts good for a brand new trader who just wants to see how trading works. There are some drawbacks however to using demo accounts to learn Forex trading.

The biggest downside to using a demo account is that you will likely only be able to trade standard size accounts with a demo account. If you intend to trade mini accounts, as many beginning forex traders do, a standard size demo account is going to behave differently than a mini account. Your margins are very different for a standard account versus a mini account. If you become accustomed to trading a standard size account, your trading methodologies will show it. This is because the larger margins offered on standard size accounts allow you to take greater profits from smaller movements in currency prices.

The other major downside to trading with a demo account for learning forex is that as a trader, you need to carefully manage the emotional aspects of trading real money. Since a demo account is fake money, detachment is easy to come by. Once you start trading your actual funds, you might just find that your tolerance for risk is much more conservative. Ideally, as you are learning to trade you are also learning how to manage your risks most effectively.

So what is a beginning trader to do? What is the best way to learn to trade the Forex, hands on?

Once you have read, studied, and completed any courses on Forex trading that you may be taking, you are ready for probationary live trading. The single best way to trade the Forex is to just Do it. Now, this does not mean to jump in and trade a full size account with real money, this would be an enormous risk for a new trader and not a very smart move indeed. What you can do is to find a broker that offers mini accounts. Mini accounts typically start at $200 and typically give you 100:1 leverage. That said, as of this writing, there is one broker (Easy-Forex) that allows you to trade a live mini account for as little as $25.

For less than you paid for any of your books, courses or training materials, you can actually try live trading. You will be amazed at how after just a few trades, the stubborn concepts seem to start making sense and you begin to understand Forex trading.

Now, if you do decide to begin your trading with one of these tiny mini accounts, you should start by making several very small trades. You should also be trading with the same system or methodology that you are trying to perfect. Your profits will likely only be a few dollars since you are trading on a small margin. This is good, however because the reverse is true as well, you are only ever risking a few real dollars. If you happen to have a series of loosing trades and wipe out the funds in your demo account, you can consider it the least expensive education you could possibly get in actual forex trading. Much better than loosing large sums of funds, and more realistic than trading a demo account. Just learn from the experience, and consider it a good deal on a valuable lesson.

Once you are comfortable trading your mini account, you can always have it converted to a regular account (with an additional deposit) if you choose. Overall, it cant be stressed enough, the best way to learn the Forex is to have experience with live hands on trading. This article showed you ways that you can do this at a minimal cost and with the smallest amount of risk.

Stock market vs Forex what recommended for beginners and why ?

hi all
i want to know what exactly are the advantages and disadvantages of each market In relation to the other market .

so a beginner like me who only has few 1000s' dollars ( 5000$ - 6000$ something in between ) do you recommend me to learn and invest my money in forex or stock market ?

Or maybe just any good third option :)

thanks

Answer
Hi Alex,

First of all, let me tell you that the two markets have different kind of style. Yet, they are very risky venture to conduct by newcomers who do not have all the necessary things like the knowledge, education, tools and experience. So, it is not recommended for anyone who still new in these two types of business to just make some deposit and trade. There are steps you should know and take before you can be sure that you will be succeed in this paper money investment business.

So, the difference between those two markets are as described below;

The Stock Market,
Advantages of doing stock trading is that we can focus to rumors and news more deeply before the technical analysis. It is because doing stock trading means that you are trading on the rise or fall of one particular company. So, it is more focus and you can be more focus on following that company's progress rather than to have moving from one company to the other trying to look for the best candidate that you think will make significant progress after sometimes.

Disadvantages of doing stock trading is quite many I'd say, First, you have to conduct your research of one particular company and you have to do this very deeply. You want to know how much is their starting capital, what kind of products they make, what steps they've taken to promote their company and products, how many people involved in that company, what about their competition etc. The research is extensively long and it is required deep thoughts and experiences in learning about some or new company that just been listed in the stock market. And also, they are traded on office hours only. The brokers will charge you with quite commissions whenever you make trades and the amount of capital needed to start this venture is usually too big for ordinary person like me. So, in short, stock trading is not my kind of investment.

The Forex Market,
Advantages, We can make quite small deposit to participate in the currency markets. Since many brokers nowadays are offering us with micro accounts so I think it will be worth a while to try to do live trading activity with such small account for practice purpose. And this markets open 24/7, so this means that we can trade this anytime we like and we can adjust our time to trade where ever we are right now. We could also get quite nice leverage, which in the States, the max leverage we can use now is 1:50 this number just been regulated by the NFA not too long ago. And also, since the Forex brokerage business is so fierce these days, we can take more advantages from brokers by getting their sophisticate trading platform that we can use for free.

Disadvantages
Because the currency market is so wide and huge, it is hard to keep up with all the pairs. And this could be very dangerous too because the currency price is moved by market sentiment, rumors, fundamental, political issue of particular country and events that may or presently taking place in one of those particular countries. What I mean is that the currency market is so dynamic, it can turn 180 degree in a sudden without warning from any news releases or something. Just a slight bit of political news, for instance, could change the whole analysis of the pairs.

Good luck