Forex

2) Find your own trading system. Again, not necessary to spend money on a system someone else has created. The success of a system has little to do with the system and much to do with the trader of that system. Use the resources online to help you build a good system and then stick with it.

3) Open a demo account and start practicing. Practice your system rules using a free demo account. Spend at least 3-6 months before going live. The balance of the demo account should be equal to what you plan on starting to trade. Don’t open a $1,000,000 demo if you plan to start trading $500. DO NOT go live,until you are successful with your demo account.

4) Learn to be an emotion-free trader. There is a reason 90% of Forex traders lose. Work to become a disciplined, emotion-free Forex trader.

5) Choose the right Forex broker for your system. Choosing the right broker is key. Every broker is different, and depending on the system you trade, one may be better than another.

You should never invest money in foreign exchange if you are looking for a steady return on your money and you should never invest money that you cannot afford to lose.

Therefore, foreign exchange trading is only recommended for those who are experienced and/or have knowledge of the market and the inherent risks involved. All potential investors should be clear of the risks involved in foreign exchange prior to investing in the market.

In foreign exchange, there are no guarantees of profits and there are significant risks. You should be wary of any companies promising high returns with low risk. The CFTC (The United States Commodity Futures Trading Commission) has issued an advisory to investors on foreign currency trading fraud.

It is well know that most Forex traders lose money. Is there good proof that there are Forex traders that have made money over the long haul, say 5 years? Or is making money mostly a matter of luck, and eventually everyone loses money.
The problem with forex trading is that it is too speculative and that the transactions are too volatile because of the current world financial crisis.

As for good sites for tips, news, analysis:I use bloomberg for my economic news. Keep in mind – I trade a longer term strategy that is not significantly affected by intraday news releases so Bloomberg works for me. If you plan to scalp you will need a source to give up to the second news as well as an “economic calendar”. I recommend forexfactory but there are plenty of others. Just google Foreign exchange  economic calendar.

As for analysis, I like fxstreet. It is free and has decent content. However, what you will quickly learn is to not give into the hype. You will find that one analyst will say one thing and another will entirely contradict the first. Read with an open mind and then use your own knowledge to choose how you react.

And for where to find good tips…that is a hard one. Most tips are trading system specific and may not be right for you. However, probably the best way to get trading tips is by joining a free Foreign exchange traders forum. I like forexfactory, fxfisherman, or babypip’s forum. Just google any of those three.

Question:

Answer:I would recommend you to read lots of books and online tutorials before you jump here. Here are few tips i read on net which would surely help you to understand this market well.

1. Implement a trading plan.

“If you fail to plan, you plan to fail”. A trading plan is especially crucial in Forex trading to stay ‘in-control’ against the emotional stress in speculative situation. Often, your emotions will blind and lead you to the negative sides: greed causes you to over-ride on a win while fear causes you to cut short in your profits. Hence, a well organized operation has to be predetermined and strictly followed.

2. Trade within your means

If you cannot afford to lose, you cannot afford to win. Losing is a not a must but it is the natural in any trading market. Trading should be always done using excess money in your savings. Before you start to trade in Forex, we suggest you to put aside some of your income to set up your own investment funds and trade only using that funds.

3. Avoid emotion trading

If you do not have a trading plan, make one. If you have a trading plan, follows it strictly! Never ever attempt to hold your weakened position and hope the market will turn back in your favor direction. You might end up losing all your capital if you keep holding. Move on, stay within your trading plan, and admit your mistakes if things do not turn as you want.

4. Ride on a win and cut your losses

Foreign exchange trader should always ride till the market turns around whenever a profit is show; while during losing, never hesitate to admit your mistakes and exit the market. It is human nature to stay long on loses and satisfy with small profits – this is why as we mentioned earlier that a strictly followed trading plan is a must-have.

5. Love the trends

Trends are your friends. Although currency values fluctuate but from the big picture it normally goes in a steady direction. If you are not sure on certain moves, the long term trend is always your primary reference. In long run, trading with the trends improves your odds in the Foreign exchange  market.

6. Stop looking for leading indicators

There aren’t any in the Foreign exchange market. While some firms make a lot of money selling software that predicts the future, the reality is that if those products really worked, they wouldn’t be giving the secrets away.

7. Avoid trading in a thin market

Trade on popular currency pairs and avoid thin market. The lack of public participation will cause difficulties in liquidate your positions. If you are beginners, we suggest the big five: USD/EUR, USD/JPY, USD/GBD, USD/CHF, and EUR/JPY.

8. Avoid trading in too many markets

Do not confuse yourself by overtrading in too many markets especially if you are a beginner. Go for the major currency pairs and drill down your studies in it.

9. Implement a proper trading system

There is hundreds of trading systems available on line. Pick one that you are most comfortable with and stick with it. Stay organized in your trades and fully utilized stop-loss or limit functions in your trades.

10. Keep learning

The best investment is always the investment on your brain. Without a doubt, Forex trading needs much more than just a few guidelines or tips to be successful. Experience, knowledge, capital, fortitude, and even some help of luck are all crucial in one’s success in the Forex market. if you lose in a trade, do not lose the experience in it. Learn from your mistakes and regain your position in the next trade.