forex charting

The first thing I need to say is that trading Forex is not easy. It is also highly risky.

I’ve lost all my money 3 times already. And that is a very common occurrence. Even experts lose their money from time to time. The point is they know how to come, or should I say “crawl”,  back.

Earning large profits from Forex is certainly possible, and you certainly don’t need to be a mathematician or financial investment advisor to win. But there are many factors behind the conditions of Forex trading. Many are not obvious, and  feel that some are plain invisible.

I’ll talk about actual trading strategies at another time. But these are fundamental to success.

But for now I just want to address how a beginner should approach currency trading.

Firstly open DEMO accounts and practice trade. It sounds boring and restrictive, and I know you are probably itching to earn real money, but you need to do this for more than 1 month. You can open more fresh 30 day accounts easily when you need to. You often don;t even need to change broker.

The reason for needing to practice for more than 1 month, is you need to live through some market crashes, to see how you react, and what you should do. And believe me, the market will crash and that is totally beyond your control. And that’s the point!

Also you can’t just stop trading if it is windy, as you usually have open bids. And you either have to cut and run, and lose money, or hang around. Also when it is choppy, you can earn a lot more money, as Forex trading is about levels of “change”, not market stability. As I say, you need to live through these to see what happens, and how you cope.

I also want to cover the 3 main “styles” of Forex trading;

1. Long term manual trading
2. Short term manual trading
3. Automated Forex Trading

I feel these trading styles are very different jobs and disciplines, and you need to know which you are

Long term manual trading:

This has the highest “potential” rewards, but requires the most funding. For this you really do need to know more about financial markets and the way countries handle their currencies.

I can;t stress the need for adequate funding, or reserved trading, enough for this one. You need funds to cover 100~1000 times dips, to cover market crashes. Otherwise you get closed out whether you like it or not. You can only play it long, if you can finance all the funding changes within that period.

Short term manual trading:

By short term I don’t just mean “day” trading, although that is certainly included in this style of trading. But short term usually means within a month, or more correctly, between financial land marks, like budget announcements. The main thing with short trading, in my opinion, is you need less funding, but you must be prepared to cut and run and make losses. As you can’t cover large dips, as you simply don’t have the funding. So you need to be prepared to end early and minimise your losses. I’ll talk more about that, elsewhere. It’s a seminal tactic.

In long or short term trading, you can also consider paying for “signals” from an expert. This is a can of worms, but something else to add to the options list. It means they will do the market analysis for you. But remember, YOU need good funding to cover this, and they may still be wrong a good 20% (1 fifth, or 1 in 5 trades, which may all be sequential or not)  of the time. No expert is that fool proof, regardless of what they may say.  One off day of theirs and it is your money!

Automated Forex Trading:

Automated trading is my current preferred route. I mad way more money doing manual treading, but it became like a job, watching it all the time. And i have other things I would rather do.

With “Automated Trading”, I set the rules, and it trades for me, regardless of what I do. I don’t even have to be there. I just have to fund it sufficiently for my trading formula.

The trick, obviously, is getting an automated system that works. and that is a total can of worms. Most EA trading robots are complete garbage. they work once and then lose you money hand over fist. I have gone through about 38 of them so far.

Anyway that is a topic for another day.

Happy and SAFE  Trading

Forex Pete

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