Forex Trading Archives

Learn How to Benefit From Forex Trading

Forex trading can be intriguing, but also confusing for a beginner. Where do you begin? What path do you take to see the greatest level of success?  Why is it worth trying at all? Read on and we will provide you with some Forex tips to better understand the Forex markets and find the success you’re looking for.

Once you know what your goals for the foreign exchange market are, it is then time to make plans to act on these goals. You should create a time frame of when you plan to accomplish parts of your goals. You should also plan for any possible failures that may happen when engaging in the market. It never hurts to have a backup plan. 

Before you start trading on the Forex market, be sure to develop and implement a trading plan. Such a plan is crucial as a safeguard against letting the emotions of the moment disrupt your strategy. Come up with a solid, organized plan and follow it regardless of your emotional state at any moment. 

One of the most important aspects of trading in the foreign exchange market is to practice Forex money management. You should try to minimize your losses and maximize your profits so that you do not lose all of the money you have made thus far from trading in the market by doing risky gambles. 

To avoid making ill-timed and costly trading moves, you should consider staying out of the market if the fundamentals just don’t justify market entry at the time. In other words, avoid entering the markets out of boredom or just for the sake of trading. Staying on the sidelines is a position in itself, and sometimes it just pays to hold that “out-of-market” position until the fundamentals improve. 

A great way to gain knowledge about the Forex market is to share your experience with other Forex traders. This is an excellent source to discuss strategies that have worked for you and ask any questions you may have that can be answered by more experienced traders. Try and find a good network of traders you can bounce ideas off of. 

When trading with Forex, you are going to lose some trades from time to time. There is just no way around this. The worst thing you can do is to become discouraged about a losing streak. Stick with solid strategies, evolve to the market’s sway, and stay on a logical path to trading. Smart traders ride out the bad weather and end up richer.

It’s very important that you take care to choose the correct Forex trading strategy. Identify a trading style that is in sync with your way of thinking. Decide whether a scalping system of a swing system will work best for you. Make your choice, learn everything you can about it, and stick with it for the best results. No matter what style or strategy you choose, never take unnecessary risks. For example, you should never risk greater than two percent of your capital in any one trade.

So that’s it, a few Forex tips and tricks to help you find success when trading Forex. Follow these tips to alleviate some of the confusion and get you started on the road to success. Remember also to keep researching, and keep learning. Before too long you will be writing and sharing a few Forex tips of your own.

Be Sociable, Share!

How to Be Successful With Forex Trading

You could easily make money online with Forex. Read these tips to learn how Forex works and find out how you can get the proper Forex training to become a good trader. You need to do your research before you start trading: start by reading these tips to understand how you can become skilled.

Keep up with any announcements or speeches made by key financial figures, like the executives from the Federal Reserve Board. What they say can carry a lot of weight in the financial world and can influence behaviour in the Forex market. When you understand the implications, you can make smart choices with your trades. 

After losing a trade, do not try to seek vengeance and do not allow yourself to get too greedy when things are going well. It is very important that you keep your cool while trading in the Forex market, because thinking irrationally, can end up costing you money in the end. 

Don’t ever be afraid to pull out of a winning trade in Forex if you feel that something indicates a market is about to go into decline. Even if the market does top out higher than you expected, you haven’t lost anything, you just gained slightly less than you might have otherwise. You only lose if the market goes into decline and you can’t get out in time. 

A good Forex trading tip is to try and keep your trading and analysis as simple as possible. You don’t need to be a rocket scientist to be successful at trading. All you need is a clear focus and carefully conceived goals. It’s best not to dwell on failures too much. 

You can be successful at Forex trading if you are disciplined, eager to learn, and able to read charts and follow technical analysis. You don’t have to understand why money moves in the market, you just have to watch your charts and analysis for patterns and follow them. Set-up a consistent forex trading strategy that is easy for you to understand and follow it without fail for success. 

Be very careful relying on other trader’s advice. You need to be sure that this advice will benefit you, not cause you major issues that will be near impossible to fix. You can observe their methods for trading analysis and learn how to do it on your own though. Blindly following another person’s strategy can lead you to major losses, so you may want to think twice before doing so. 

Trading should never be based on strong emotions.  Greed, euphoria, anger, or panic can really get you into trouble if you let them. While human emotions will play a small part in any trading decision, making them your primary motivator will increase risk and pull you away from your long term goals. 

Choose your charts well. Don’t rely on just one chart to make your trading decisions. Use intraday charts to reveal more information about the market’s current trends and upcoming activity. Even after you enter trades with your pre-planned entry and exit points, check different intra-day timeframes to fine-tune your choices. 

Analyze each trading loss. Learn as much as you can from your Forex trading losses – you have already paid a big price for them, so don’t let the lessons go to waste. Many traders hate thinking about their losses. This means, though, that they’re not learning from them and risk making the same mistakes over and over. 

You should have a better idea of how Forex works now. If you believe this is an activity that you could possibly make money doing, then start your Forex training as soon as possible. Remember to take the time to acquire the necessary skills and make sure you find the right Forex broker before you start Forex trading.

Be Sociable, Share!

Learn the Forex Trading Basics

If you have experienced Forex trading like I have and have traded the Forex markets for any length of time, then if you are honest with yourself you will without a doubt say that you have learned some very painful (and costly) lessons along the way.

Therefore, if I had to pass any tip or recommendation to any new Forex trader, it would be to ensure that you learn the Forex trading basics of how and why Forex markets work, because the sooner you master these basics, you will start to make good trading decisions more frequently than you will make poor ones.

It seems to me that over the past year or so, there has been a multitude of new Forex trading products on the market, and whilst many of them seem to offer fantastic profit opportunities, there is generally very little mention of the risks attached to trading Forex.

There is also very little about the Forex trading basics included with most of these products, which is a very bad thing because it is a fact that as a Forex trader, you will sometimes lose money, and you need to know why it happens and how to minimize the chances of it happening again in the future.

In short, if you want to be a long-term success as a Forex trading, you have to understand what you are doing and the only way to do so is by using an applying a proven trading strategy. Because without a proven strategy you will find it difficult to achieve long term success as a Forex trader.

Despite the fact that so many Forex trading products or guides seem to suggest that there is some kind of magic or secrets attached to being a successful trader, nothing could be further from the truth. The information that you need in order to be a success has been developed over decades, and what worked 100 years ago in trading circles still works equally as effectively today.

What you do not need if you want to be successful Forex trader are ‘secrets’ or automated systems that do everything for you. The fact is, no matter what other people might try to tell you to the contrary, you have to understand Forex trading properly if you want to succeed in all market conditions.

Relying on someone else to make your trading decisions for you, or using some automated system is not a recipe for long-term success. However, learning and applying the ‘golden rules’ of Forex trading is the way to build a long-term, successful trading business.

Be Sociable, Share!

Be Realistic With Your Forex Trading!

Depending upon the forex broker that you decide to deal with, they may offer some kind of advisory or even a forex management system, so that they make all the forex trading decisions for you. Perhaps these sites will gain your business because of their previous track record, and that makes perfectly logical sense:

The fact is, you can generate extremely good cash returns by trading forex, but it is absolutely critical to enter the business with a realistic attitude.

Most importantly, you should not expect to start making huge returns on every trade that you place as soon as you start trading, because it is not going to happen.

forex trades

Unfortunately however, because they have seen achieved performance track records with some fantastic figures to back them up, far too many forex beginners come into the forex trading business expecting to become a millionaire within a couple of weeks.

The problem with this is not so much that it is impossibility – although the odds would probably be 99.99% against it happening, it is actually possible, although I have never seen or heard of anyone managing to achieve it.

However, there is a very marked difference between working a system that gives you a 0.01% chance of hitting the jackpot in a serious and carefully considered manner, and coming into the business believing that it is going to happen to you.

With a belief like this, you are almost inevitably doomed from the start.

Your expectations are completely unrealistic and unfounded in fact, and it is therefore becomes extremely likely that you will trade in an undisciplined and haphazard fashion in order to achieve what is pretty much unachievable.

A classic example is the fact that many beginners come into the forex business willing to commit far too large a percentage of their initial account deposit to every trade. They do this because they reason that the more money they commit to each individual trade, the more profit they can potentially make, and there can be no argument against the logic of this.

However, in reality, what this is far more likely to do is, accelerate their losses, rather than increase their gains.

Once again, you have poor forex risk management in evidence driven by unrealistic market expectations, and that is certainly not a recipe for long-term success.

forex pairs

Approaching forex trading in a realistic manner is incredibly important. Getting into the business slowly and gently is far more effective and ultimately profitable than diving in with a big gamble that you know is going to win, because it won’t win, you can almost take that as read.

You are not going to make a fortune overnight trading forex, and the sooner you understand and accept this for the fact that it is, the more successful your trading career is likely to be.

Another area of forex trading where you will often see forex beginners with unrealistically inflated expectations is in their belief that they will be able to ‘read’ markets as well as the experienced professionals do almost immediately. Understand that many professional forex traders have been in the business for decades, and forex is definitely a business where experience can give you an edge over the competition.

This is another reason why you should take it nice and slow when you first start trading a live forex account. You’re not going to become an expert overnight, and believing that you will is going to do your business far more harm than good.

Finally, understand that the vast majority of successful traders achieve their success by being an expert in a small number of markets, rather than by spreading themselves too thinly. This is advice every forex beginner should take to heart.

Be Sociable, Share!

Forex Trading Is a Business, Not a Hobby

Some people will describe their forex trading activities as a hobby or interest. However, people who are successful forex traders never trade as if it were a hobby, irrespective of what they might tell other people, or perhaps even believe themselves.

A hobby or interest is something that you can pick up or put down any time you like, whereas trading forex is nothing like that at all.

It is a business that you can run on a part-time or a full-time basis, but that does not change the fact that you have to approach your trading activities in a businesslike and professional manner.

forex charts

If you genuinely approach forex as a hobby, then you are going to check the charts every so often. More than likely it will be when the urge to do so takes you. There will be no discipline in your activities, and you will not be in a position where you are looking out for particular situations to develop in the market as an indication that there might be an opportunity for a profitable trade.

Consequently, 90% of the profitable trade opportunities will pass you by, while you are likely to put money into the market when the idea appeals to you. In other words, your trading activities are driven by emotions and interest levels rather than by a system.

You cannot run a successful forex trading business in this way.

You must have a business plan, a plan that is disciplined and objective driven. Not only must you have a set of rules that dictate when you will trade and when you will not, you must also have rules that govern how you run your business on a daily basis.

There is an old saying that might be something of a cliché, but one that is nevertheless true that ‘if you fail to plan, you plan to fail’.

This is completely true of your forex trading activities, so if you have never created a business plan before, now is a good time to start learning how to do so! Because without a trading business plan you are being realistic on how you want to trade.

Be Sociable, Share!

Much as the image might have a great deal of appeal, you do not meet many successful forex traders who are loose cannons, mavericks who trade on gut instinct, hunches and intuition.

On the contrary, most successful traders are calculating and ruthless, people who work to a very well established pattern and system which allows them no room for emotions or hunches to get in the way.

This is absolutely critical factor for a forex beginner to understand. When you trade forex, you must do so by following a forex trading system and it is essential that you teach yourself to cut emotions out of the trading picture completely.

forex currencies

It is essential that you learn everything about the forex trading system you are going to use. You need to understand why it is so critically important to your forex trading. However, even at this point, the essential thing to understand is that you cannot allow your emotions to dictate how you trade.

There are several characteristics that you would commonly associate with successful forex traders. Most successful traders have a high degree of self discipline and an ability to detach themselves from what is happening in the markets so that they can analyze the action in a manner that enables them to trade only when it is logical and sensible to do so.

A large number of forex beginners tend to treat trading something like a lottery, viewing the potential to make profits or suffer losses from trading forex as something that depends on good luck or fortune.

While an experienced trader will sit on the sidelines if they do not see a valid trading opportunity developing, a forex beginner will dive in because they want to start making money from their trading activities as quickly as possible.

In effect, they allow their heart to rule their head, and that is a pretty surefire recipe for financial disaster!

There is no luck involved, and you do not make consistent, long-term profits from forex trading on hunches.

You need a forex trading system, because without the system you have no structure to your trading activities and you must treat your trading as a business not a hobby.

Be Sociable, Share!

As far as forex trading is concerned, you make your trading decisions based on a trading system, and of course, this system itself must be based on something. Generally, trading systems are based on forex market analysis, of which there are two types – known as fundamental and technical analysis.

A fundamental analyst would be someone who watches world events and day-to-day occurrences that can affect the performance of forex markets. They would for example look out for major financial news, political events that could cause instability in particular currencies or even major disasters (both natural and man-made) which can throw markets sideways.

forex markets

As examples, forex markets across the world were thrown into turmoil by the events of 9/11, and even something as unconnected to finance as the earthquake and tsunami that hit Japan this year (2011). This type of incident made the forex market jitter.

While following world events that inevitably affect forex markets is a valid and extremely valuable way of analyzing what markets are likely to do, for the small private trader, conducting proper fundamental analysis that would produce accurate market predictions is almost impossible.

After all, it is simply not feasible to keep your eye on everything that is happening in every country 24 hours a day, so the danger of trying to be a fundamental analyst for an individual trading their own account is that they are likely to miss many of the most important events. Hence, although fundamental analysis is still used, it is generally only used by pan-global banking corporations and multibillion dollar conglomerates.

The alternative to forex fundamental analysis is a forex technical analysis, which is based on using charts to plot what is likely to happen in the future based on what has happened in the past.

This works because chart patterns have a history of repeating themselves and while it can never be true that what happened in the past is always going to exactly happen the same in the future, similar chart patterns do tend to be repeated on a fairly regular basis. On the other hand, it is the fact that they are not repeated every time that makes it inevitable that you will have to suffer trades that do not go in your favor, as all forex trading systems work on the basis that the charts indicate a pattern that is likely to be repeated.

Technical analysts believe that all fundamental events that effect forex markets are already built into the information that is presented in chart form, with very few events coming along that had never been seen before. Of course, this is not 100% accurate either as proved by the events of 9/11, but as a general rule, there is a good degree of truth in this, hence the propensity of chart patterns to be repeated.

The vast majority of private forex traders use technical analysis as the basic bedrock of their forex trading system. They take a chart for a particular currency pairing and plot various indicators on that chart through which they can see buying and selling signals.

Be Sociable, Share!

Trading forex online is an extremely democratic process but it is best approached first via a forex demo account. It is something that anyone can learn and can make good money with as long as they learn to trade properly. With some online brokers willing to accept an initial deposit from as little as $25, online forex is something that almost anyone can afford to become involved with.

Apart from learning what the forex industry is all about, the other thing that you will need to do is find yourself an online forex broker. This is not at all difficult, as there are dozens of such companies operating online.

In many countries, the financial services regulations forbid non-qualified people to give specific advice, and it is therefore not possible to recommend any one particular broker above any other in a book like this. However, all you need to do is run standard Google search for ‘online forex brokers’, as this will turn up plenty of information:

When you access any broker’s website, you will get a clear picture from the home page of exactly what kind of service they offer.

Very commonly, they will include an online trading software program that allows you to practice with your trading system, and many brokers will also offer you a forex demo account, where they will give you a notional deposit of fictitious money to allow you to trade, as a way of honing your skills.

Sometimes however, using a forex demo account is not a good thing, because while it is fun and can be informative to practice using such an account, it can create a very false sense of knowledge and ability. It is therefore critically important to understand that trading with a forex demo account bears little resemblance to doing the same with the real thing.

This is a very common mistake made by forex beginners who, because they have a degree of success practicing with their demo account suddenly realize that they have ‘a gift’ that miraculously enables them to ‘do this forex thing’.

Consequently, they put together their initial trading deposit, open a live account with the broker of their choice, and dive straight into ‘real’ trading.

And guess what?

All of a sudden, instead of making the gains that they were making when they were trading their forex demo account, they are now making losses when trading live. Moreover, with every loss, they can see their initial margin disappearing under pressure that is mounting at a corresponding speed.

Trading a forex demo account is completely different from trading using your own real money.

With a demo account, there is no real money involved and even if there were, it is not yours. Hence, there is absolutely no pressure on you to be successful, and indeed, some online forex brokers actually exacerbate this problem by allowing you to reset your demo account back to the starting point every time you make a loss.

Consequently, there is no pressure to perform when you are trading a training account.

However, as soon as you trade with your own money, the pressure to perform is on, and you should not underestimate how tough this pressure can be. It is pressure that forces mistakes, and it is mistakes that will lose you money.

Forex demo accounts and the real thing are like chalk and cheese, so just because you become a ‘demo wizard’ does not actually mean anything at all as far as future profitability is concerned.

Be Sociable, Share!

As a forex beginner you must have a trading system. This will allow you to trade in a professional manner and will ensure that your forex trading is consistent and free from risk.

Equally important, it must be a trading system that is both practicable and workable, something that is simple enough to make sense but not too simple that you can learn nothing from it.

Most forex beginners try to come up with a whizz-bang new forex trading system that is sensational and guaranteed to come up with a winner every time. They do this by making the system that they then try to work with way too complex on the basis that the more complicated their system is, the more effective it must be (according to their logic).

It doesn’t work that way, and an overly complex forex trading system will confuse you, give you the wrong information at the wrong times and thereby lead to lots of mistakes.

Forex trading mistakes can get to be very expensive, so make sure that you have a system and work with it, but keep it simple enough to make sense and therefore money!

You must stick to the system you have decided to use and do not deviate from it in any way. Why over complicate something if it is being successful for you. You will only create more problems for yourself in the long term. Keep your forex trading as simple as possible and you will succeed. But always make sure you practice trading in a forex demo account before you begin to trade live.

Be Sociable, Share!

I don’t know if you’ve noticed it, but trading forex has become incredibly popular recently. The fact is, there seems to be a new forex product coming to the market almost every week, and almost without fail, every one claims to be the greatest thing since the proverbial sliced bread.

So, if you are interested in how to trade forex for profit then it is important to understand that despite all of these new products, making money from forex trading is essentially a pretty simple thing.

trade forex

In forex, currencies are always quoted in pairs, and when you buy one currency, you do so in the expectation that it will increase in value against the other currency in the pair.  If you get it right, you make money, but if you get it wrong, you lose.

Similarly, if you believe that the value of a particular currency is likely to go down, you can trade on this as well, and if it happens the way you expect it to, you again make money.

If it all sounds easy enough, well, in simple terms, it is, but there is one essential that you cannot afford to overlook. Every successful forex trader – without exception – has a system that they use which dictates when they trade and when they don’t, and if you want to achieve forex trading success, you need the same.

Having a trading system is all about using and understanding signals that the market gives that it is about to move in one direction or the other. Armed with these signals, you then trade on the basis that past history makes it likely that a market move is probably going to happen, one way or the other.

Of course, the market does not always do what you expect it to do, but taking losses is all part and parcel of trading forex.

However, a good forex trading system is one that has an inbuilt degree of protection so that when a trade does not go the way you expect, you get out quickly with minimum losses. At the same time, a quality system is also one that allows you to maximize the profits when you get it right, which in itself is probably the single most important ‘key’ to being a successful forex trader.

One thing that I have noticed over the years of trading forex is that it is almost invariably the simplest trading systems that are the most effective. You need the kind of trading system that even the greenest forex beginner could work with, and with some online forex brokerages now willing to work with investors who have as little as $25, there really is no reason why even if you have never traded forex before, you cannot get started right now.

Be Sociable, Share!
 Page 1 of 2  1  2 »