Newbie Trading Alternative

[Fetor]

This is just a thought for beginning traders as a way to practice with real money, but yet not lose their shirt.

You will need to have a broker such as GFT that offers a wide variety of pairs to do this. Some of the less commonly traded pairs such as the CAD/DKK or the CAD/HKD cost far less to trade. You don't make as much on the trade, but in the process you don't lose as much either. For example the CAD/HKD is .13 PIP value (USD) and the CAD/DKK is .21 PIP value (USD). The only glaring problem, and it is glaring, is some of the incredible PIP spreads you have to overcome on some of these pairs, so this may not be a good idea in the end. Each pair does have it's own characteristics, and maybe this is not a good idea to practice on a pair that you are not planning on trading consistently. I'm just throwing this idea out there.

Edited Comment: Even though the PIP spreads are larger. If you have a 20 PIP spread that would equal about $4 with a .21 PIP value so monetarily it is about the same amount as a 4 PIP spread on a major. After that initial cost for the spread any move against you is still only 1/5 (using the CAD/DKK as an example) of the majors.

Since we espouse practicing with real money as soon as possible as the best way to learn how to trade, if you do not have a broker that offers mini-lots the above may be an alternative idea to using real money to learn, but reducing your risk and potential loss in the process. The pairs I used in the example above are just one of many pairs that have low PIP values. GFT's software offers a PIP calculator which shows you the base amounts of all of their pairs.