Unfortunately there is no Holy Grail, however, you certainly can tip the odds in your favor.
Trading the forex market can be very exciting, and most traders are attracted by the lure of easy money. Trading is in fact very easy, as all you need to place a trade is a click of the mouse. By doing this you will certainly be in a trade, but will you make money by trading in this manner without having a clue? No way! You may have a couple of lucky profitable trades, but your luck will not last, and your adventure of trading will be an expensive one. It is actually easier to lose your money than you may think.
What we are going to want to do now in order to have an edge and tip the odds in your favor, is educate yourself. In order to compete at the highest level in the trading business and be one of the few truly successful participants you must be well-educated.
It doesn't even have to cost you money. There is so much free information on the internet, you will find you will stay up until all hours of the night learning.
Here are a few ideas to start you off.
You will want to learn all about:
Japanese Candlesticks
Bar charts
Different methods of entering a trade. for example: Limit orders and market orders
Money Management
Psychology of Trading
Discipline
And so the list can go on and on: Education is the key to your essential knowledge of trading, and the learning doesn't stop when trading real dollars begins.
Just as students go to university to study, you have to learn all the fundamental elements of trading, the difference being, that you do not get a degree, nor do you need one. The market does not care how intelligent you are. It is important to learn to read the market, learning to recognize when the market is trending or range bound.
Once you have been to "school" and studied every aspect of trading, you will then be ready to start a demo account. In order to do this you will want to dig deep, and decide what type of trading suits your personality.
Would you want to be a day trader, or would you prefer to take one or two trades a week? Would you prefer to trade the forex market, stocks or futures?
Advantages to trading the forex market is that it is open 24hours a day 5 days a week, which gives you the choice of when you want to trade. If you live in Australia you can trade during your daytime, if you live in the UK you can trade during European times.
Another very big advantage is that you can trade very small. You could open a mini or micro trading account with $500. This way you could get the feel of trading with your own money but keeping your risk very low. If you make silly mistakes you can learn from your bad trades. Once you are feeling more confident you can increase your account and your risk.
Never risk more than 2% of your account on any trade. Always know where you will place your stop loss and profit target before you enter a trade, and never move your stop or profit target while in the trade. Don't worry about the amount of profit you make to start, but rather keep track of the percentage of winning trades.. Once you have this right, your profits can be increased.
Study seriously, practice with precise entries and exits, and be very disciplined emotionally and with your money management.
Linda Wainman is the author of the day trading book "Keeping it Simple".
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