Diary of a Novice Forex Trader

I registered myself for a forex trading account at Forex Capital Market, it being the most visually attractive forex trading site which I found. I suppose my major reason is that the company doesn't require a hugh capital to get started.

After answering their survey questions, I received an e-mail from them:

"Welcome and thank you for choosing Forex Capital Markets LLC (“FXCM”). FXCM is committed to the practice of the highest standards of commercial honor and just and equitable principles of trade. As a part of our ongoing commitment to regulatory compliance, there are certain occasions where FXCM feels obliged or may be required to inform clients of the high risk involved in currency trading.

FXCM reviews various criteria on the account application. Based on your responses to questions on the application, we have identified that you fall into one of the categories below and encourage you to consider whether trading currencies is a suitable investment for you.

After reading the disclosures below, if you decide that you still want to open a trading account, simply follow the funding instruction provided to you in another email notice from us or from our website to fund your new account. You do not have to respond to FXCM to continue your account opening process.

You have fallen into one or more of these categories:

1. Age - 18 to 21 years of age
2. Age - 65 years of age or over
3. Currently Retired
4. Currently Unemployed
5. Filed Bankruptcy
6. Annual Income under $25,000
7. Net Worth under $25,000
8. Liquid Assets under $25,000
9. Trading Experience – No Experience in all 5 Trading categories
10. IRA account, i.e. retirement funds used as risk capital

Based on the above said criteria FXCM believes that in your case leveraged foreign exchange trading may be too risky. Please take the time to consider this matter carefully before deciding to complete the account application process.

If you have pursued only conservative forms of investment in the past, you may wish to study currency trading further before continuing an investment of this nature. You must realize that you could sustain a total loss of all funds you deposit with your broker as initial margin as well as substantial amounts of capital, when trading currencies or currency options, should the market go against your investment. You must also realize that the limited risk in buying options means you could lose the entire option investment should the option expire worthless.

Additionally, you must fully understand the nature and risks of currency and currency options investments. You should not proceed with your investment if you will be unable to meet your obligations to others should you suffer investment losses."

What they are saying is that I'm a novice (which I already know I am) and that I might lose all my money in forex trading. I'm not about to quit over the e-mail, but I do need to carefully study what I'm getting into.

However, they did call me over the phone to ask if I'm going to make the deposit into my account, which is USD300 for a mini-account. That I should be able to raise in a couple of weeks. In the mean time, I have a few books on forex trading I'll be reading to educate myself and prepare for an actual trade. There's also demo accounts on FXCM websites for me to test out my trading skills and see if I'd actually crash and burn with the USD300.

There is also a local forex trading company which I'll be visiting soon. Their requirement to open an account is USD10,000. With a bit of determination and discipline, that should be achievable within the next several months. Wish me luck!