How to Win in the Forex Market By Mark Crisp At Isnare.com Ezine Articles

Forex trading is hot right now. Everyone seems to be throwing their hat in the ring and giving it ago. Lured in by the promise of big, easy money. Who can pass it up?

But look beyond the hype and what you will see is a business. It’s not easy to make consistent money trading the forex markets. Many will tell you it is..but that’s because they are trying to sell you a product.

If professional forex traders are happy to make 3% per month why is it many new traders expect to make 10%,15% or even 20%+ every month? Well, it is not all their fault. They believe the claims many vendors make. At 3% per month that would equate to over 40% per annum compounded. How rich would you get with these returns over time?

Before you even risk a dime and go chasing your “pot of gold” here is how you can protect your-self from losing money and heartache.

1) Take a deep breath and actually ask your-self would you enjoy day trading the forex market for a living or are you chasing “easy money”? There is no easy money and unless you love it it’s not a good way to make living.

2) Ignore the hype. All traders have losing periods and they do not make anything like the % returns many of those sites will have you believe. Work on making about 3-5% per month on average with at least 2 or 3 losing months. If this does not excite you then it’s best you do not trade.

3) Leverage. Professionals are scared of it. Amateurs love it. I have seen new traders jump in with 50X leverage and be wiped out in one day. A professional trader is in it for the long haul. They would never risk more than 2% of their capital on one trade. Lesson for your first year never sue more than 3X leverage. In fact I would be tempted to use less than 2X leverage.

4) Demo trade first. Instead of being in a rush to make easy, fast money why don’t you try not to lose it first on a demo account? A demo account you are simulating trading. Trade as if it was real money. Do not play around. Air pilots simulate flying for years before they go live. Why do traders jump right in?

5) When deciding how to trade think what it is you are trying to do. What you have to stop doing is jumping from one hot system to the other. EVERY method goes through cycles. Winning periods, flat periods, losing periods. Professionals are comfortable with their methods and know how to ride out their cycles. New traders tend to jump out as soon as their method stops working. I have found the less a system trades and the longer term it is (even for day trading) the more profitable it is. Very short term trading for small profits sounds good but it actually does not work.

6) Treat forex trading like any other business. Learn how to do it right. Study, ask experienced traders for help, advice. Be prepared to spend time, effort and some money learning how to do it right. There are no short cuts. Stop trying to beat the markets by buying some-ones trading software. Do not treat it like a gamble. If you are serious and in it for the long term get serious about it. The rewards are amazing for the few who stick it out.

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