The Forex markets are huge and full of liquidity at almost any time of the day. This makes it easy to get in and out of positions without fear of not being able to. It leverages the power of different time zones and countries to allow the individual to trade like never before. That simple idea, coupled with the ambition to make a profit draws many to these markets. It seems so simple, but as many find out, it is extremely hard to be successful. To increase your odds consider the following:
1. Open a demo account and find your favorite time of the day. Trade for an hour during the same time to get and get a feel for the pair you want to specialize in. Once your profitable, grow your trading business by scaling it up.
2. Markets move quickly at certain times of the day. As an example, when the market opens, during scheduled news events and other event driven times. If you are having trouble making money in a demo account change the time of day you are trading. Find times when you know there is increased volatility to move market price more. Stick with this time every day and see if it makes a difference for your trading and profitability.
3. Don't get greedy. Start by looking for singles and be happy you are making a profit. Multiple singles can add up quickly as long as you have a trading plan that limits your loses. If your risk to reward on each trade is not 2 to 1 or greater it will be hard to make money in the long run. Take the singles for now and push your limits as you generate wins and confidence.
4. Trading is nothing more than gambling if you don't have a trading plan and strategy that works. Take the time to learn the markets and develop your strategy before you trade. While it may not ensure you are profitable, but it will limit your loses when things don't work out.
5. Stop trading with your emotions and stick to your trading plan. When positions go in the red traders become gamblers and do one of two things. They go all in and buy more which commonly turns into a greater lose. Or, they cut their loses quickly and watch as the position moves into a profit. The solution, is to have a successful trading plan and sticking to it. The goal is not to win each trade, it's to make money over time. Your trading plan should do that, if it doesn't, get a good trading plan and paper trade it successfully for a while first.
Forex can be a great opportunity to play on a big field and be profitable. But, it's not easy and you will most likely fail without a solid plan. Think about what you want to accomplish, develop a strategy and paper trade until it is profitable.
For more information and a free forex trading e-book go to http://bit.ly/vHrF45.
Joe Tavenner CSP, CFPS has over 15 years of experience, a bachelors and Masters degree in Occupational Safety Management and an MBA in Management. He trades forex as a hobby and has a blog full of free resources, articles and product reviews. If you are looking for more forex information go to http://bit.ly/free4u123.
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