basic Forex 3

FOREX Strategy

Here are a few things you should learn about Forex trading if you want to make some real money.

Follow Trends. No matter how many factors you take into account, it still comes down to a degree of guesswork. There is a great deal of money to be made from simply following already existing, reliable trends than jumping in and out as it reverses.

Have a Trading Plan. Your plan doesn't have to be very precise. You have to set some limits for yourself. It takes a great deal of discipline to be a successful FOREX trader. Frequently you'll feel your emotions start to play into and affect your decisions, but you've got to do what's ultimately best, think rationally and sell when you need to sell.

Employ a Trading Program. FOREX trading programs are slowly becoming the new standard of trading, with over 30% of all traders currently using them now in 2009. These are programs which automatically trade for you by analyzing real time market data and reacting accordingly. They are equally as effective for beginners as well as experienced traderss.

FOREX Basics

Successful FOREX trading is a combination of a simple method and having the right mindset to succeed. It is not easy to win at FOREX trading and the facts prove over nine in ten people who attempt to trade FOREX lose. The good news is however that profitable FOREX trading is a learned skill. You don't need to work hard, you just need to learn FOREX trading the right way.

Anyone can learn a system but there is a trait you need to win and that's the discipline to follow the system and preserve equity in losing periods. Trading through periods of losses is hard, the market gives you losses and it hurts your pocket and when this happens, your emotions want to get involved and make you deviate from your system rules.

Any trader can learn to be disciplined but it is based on confidence which comes from the right education and accepting the fact that you have to keep your losses small until you have profits again.FOREX trading success involves having a simple system, combined with the discipline to execute it correctly, run profits and cut losses quickly.

FOREX Tips

Know your risk ratio versus your earnings ratio. The analysis of risk and profits is extremely important for any FOREX trader. Minimum risk you should use is 2:1. If you are trading GBP / USD and you want to gain 50 pips, you should not risk more than 25 pips.

Have a suitable capital. If I lose 50% of my starting capital in a 6 months period, can I still be a trader? Only if the answer is ‘yes’ you can start trading. Your trading freedom must not be influenced by your fear to lose.

Is this a Trend or Neutral? Learn how to analyze the FOREX market. In a market trend, follow the trend, in a neutral market, buy low and sell high, since you are using stop loss, and you control your risk.

Understand how the market thinks. Everybody should accept that any information is already included in the price of a currency pair. You must know the indicators to come, and you need to know what is already anticipated by the market. The vast majority of the publications of the market is already anticipated and prices by the market.

Know why you are in a trade. Keep a journal of your trades and record exactly why you went into each trade. Do not be impulsive and follow your strategy, that way you will learn what strategies work for you long term and which do not work.

Study. Learn new ideas, keep up to date, and do not trade on the ideas of others, you should always know why you are in a FOREX trade.

Common Mistakes in FOREX

In FOREX capital market every trader makes mistakes.

Errors in Order Entry. The quickest way to lose money in FOREX is to make mistakes when you place your orders. Fortunately, every trade entry today has some kind of order confirmation mechanism.

Use Only Risk Capital. The Golden rule of FOREX is to play with small amount of money so even if you lose it, there is still plenty left on account. Risk money should be amount that you would be comfortable to loose.

Start With Enough Capital. If you are considering doing serious business in FOREX, than it is good idea to start with a bigger account. Accounts that are too small have proportionally larger fees and sometimes can even have certain limitation in trading.

Understand the Risks. This is very important factor. FOREX is highly related to different kind sof risks and you have to be aware of them. Sometimes market crushes suddenly and you can not do much about that, but there are some signals like government crisis, officials statements, market trends that troubles might be on horizon and you have to prepare yourself to that.

Take the Time to Learn. The biggest mistake a new trader can make is to start playing unprepared. The basic knowledge of FOREX can save big money.

How to Be Successful In Forex?

A lot of people want to start trading in FOREX and be a success. If you want to be successful in FOREX, you should follow these simple rules.

Have a System. Every successful trader has his own system. That is basic philosophy in FOREX capital market trading to find unique, profitable system and to repeat it constantly. That is a big secret of many millionaires. Without system you could be impacted by unsettled conditions of ever-changing markets.

Trade Small. When you are not certain that it is a good time to trade, try to play with smaller amounts. This will give you a protection from big losses and an opportunity to test the market and discover trends. Constant successful small can bring nice gains. Risking too much money in single trade can easy jeopardize your brokerage business.

Don't Trade Too Often. Maintaining control over emotions is very important for every trader. After a successful trade you can feel that you have found a winning formula and that every other trade will bring large money. That could make you leave, already discovered winning system and try to make some risky trades. Take some time to analyze every trade.

How to Calculate Risks?

Remember that you should stick to trading no more than few mini lots at once. It is highly advised to not use standard lot sizes for mini accounts offered by most of Forex traders, as it is very expensive for a mini account like yours. Aim for a micro lot of 1000 units. This will make your risks in Forex trading reasonable and will allow to achieve some positive performance even if your trading path starts with a consecutive losses.

When you invest $200 with 1:500 leverage, you'll be able to operate with virtual funds of $100 000. As a beginner, if you open 1 standard lot of 100 000 units, you are putting $10 at risk for every pip that goes up and down. How many pips would it require to wipe out your account? Not so much – 20. Also this 20 will already include the spread paid.

If you open 1 mini-lot of 10 000 units, then you will be risking $1 for each pip and your account will lose only $20. That is why it is important to select micro lots in your case. Micro lot of $1000 units will decrease the cost of 1 pip to $0,10. Losing 20 pips would mean losing $2. 10 cents may sound not so attractive in terms of making big profits quickly.

Forex is lucrative business,,, take a look at Forex in Singapore, or trading forex in Jakarta Indonesia or forex trading in Hongkong,, there are lots of opportunities to be made. Forex trading is very promising in today's global market. Where foreign currencies exchange hands.