Traders, both novice and experienced, know for a fact that foreign exchange trading can be a feasible way to increase your margin of profitability. This is still true even if it carries risks due to financial instruments’ levels of volatility. And with almost everyone joining the hype of forex, interested parties have the same question in mind: at what age is it legally allowed to trade?
Starting as Early as 18 Years Old
Age is one of the many factors that need to be considered when opening an account with any brokerage firm. And commonly, 18 is the generally accepted age to start trading.
The age policy varies according to brokerage firms’ jurisdictions and the law they implement. For example, in the United Kingdom, people who are 18 years old and above can personally register with a broker, while some countries require a person to be 21 years old to do so.
It is for a good reason that brokers have restrictions on age. Trading is a taxing activity that adults can better accommodate. Anyone under the legal age can incur severe financial damage if they aren’t armed with the proper knowledge, and this financial damage can be difficult to recover from. Moreover, trading demands years of expertise in charting and speculation to ensure that profits will outweigh losses.
Getting Familiar with Trading Early On
If you happen to be underage, you can resort to using demo accounts for practice. Almost all brokers offer this type of account for anyone who wants to test a trading platform’s interface, usability, and functionality.
This is available for people under 18 as it is only loaded with a mock balance that anyone can use for trial trading. For most brokers, opening one is free and does not require the rigorous Know-Your-Customer (KYC) verification process.
Correlating Demo Accounts with Live Accounts
One of the advantages of having a demo account is getting an overview of the platform and the markets. But it is a known fact that the results rendered by a demo account do not usually come parallel with the results generated by live accounts.
Traders must learn to make realistic assumptions to offset the noticeable changes when they switch to a live account. In addition to this, it is best for demo account owners to make room for possible slippage as volatile shares have larger slippage compared to high-volume shares in an actual account.
More importantly, mindset will quickly get you on the right trading track. Even if demo account earnings cannot be withdrawn, traders must treat it as if they are trading using a live account. Doing so will indicate your emotional tolerance and your openness to the margin of losses and risk appetite.
Getting Started with Forex at a Young Age
With the help of demo accounts, aspiring traders can familiarize the technicalities of placing a trade, riding trends, and observing chart patterns. Having enough knowledge will then serve as an advantage for a trader, so you might as well engage in enriching your trading background before opening a live account.
Traders who start early also have a unique rapport and enthusiasm. Younger people usually appear more energetic, which means they can maximize each trading opportunity better than more experienced traders who religiously follow their established trading strategies and timeframe.
What Do More Experienced Traders Have Over Younger Ones?
Simply put, young traders tend to be impressionable, most especially when losses pile up more frequently than profits. This is something that expert traders have managed to surpass as they have a higher level of understanding that anything can go wrong in trading.
Another thing is the intimidating space of forex, which younger people may find challenging to navigate. This then goes back to the need to start at an early age to offset the difficulty of learning the industry at an older age.
Lastly, a small amount of capital may give young traders a sense of hesitation when placing positions. In contrast, expert traders who manage to save enough finances can confidently go about any position.
What’s the Next Best Step for Young Traders?
You can wait until you turn 18 before legally owning a live trading account, but you do not have to wait that long to learn the ins and outs of forex trading. The point is that younger people have enough room for knowledge acquisition, and opening a demo account is just the beginning.