If you are thinking about taking the time to invest in the Forex market, then you are probably asking your self these questions in this article every day. It's no secret that trading Forex is not as easy as advertised and some how tricky. Here are some of the most common questions that I get everyday.
Is Trading In The Forex Market Safe?
No, Trading in the Forex market is very risky. If you don't know what you are doing then please take the time to read about it, get educated, check free websites like babypips and forexpeacearmy. Learn how to come up with a strategy that suits you and your capital.Remember 99.99% of Forex products being sold out there are useless and you will most probably end up being scammed. So to make it in this business you need to take your time learning as much as you can about it. Test your skills on a demo account for at least 6 months before taking the decision to trade with your real money.
What Are The Most Popular Forex Indicators?
Forex indicators have been out there for too long that all of them by now are popular. Mainly the most common ones are Stochastics, MACD, Moving Averages, Trendlines, RSI, etc...They are so common that using them is not so profitable after all. If you will rely solely on indicators you probably wont make it in this business. Indicators will never give you the edge it's a tool that everybody else is using. On the other hand, If you can identify price action, behavior and patterns, along with few indicators to be used only as a confirmation before pulling that trigger then this might give you the edge.
What Is The Best Forex Robot Available?
Forex robot is a computer software that monitors currencies behavior over time and make calculations to figure out the best time to buy and sell. These programs help to take some of the guess work out of buying and selling and can help a trader to spot currencies that meet certain criteria.
Most of the selling points of Forex robots state that you can simply set them and watch the cash come pouring in. While in some cases this may work, in most cases you are going to need to carefully monitor the program and make sure that it is adjusting to trends in the market. While they can be very profitable they may require a certain amount of intervention to be run effectively. Used properly, and if you have the patience to get to know the programs, they become a powerful tool.
Another way to go is to find a good account manager to trade for you if you don't want to spend all that time learning your self how to trade. Just make sure to do your homework and double check that the account manager you are going for is not a scammer.
Can I Make 10-20 Pips Per Day Trading Forex?
It may sound simple to achieve but actually it's very hard. You should always take into consideration the spread. for example, If your target is 10 pips per day, and you have a 3 pip spread on GBP/USD, You'll basically be paying about 30% of your winnings to your broker. Also you have to make sure if you target only 10 to 20 pips a day that your stop loss should also be 10 to 20 pips a day. This way if you lost a trade you can easily make up for it in your next trades, but if your stop loss is like 100 pips and you target only 10 pips you will need 10 trades to make up for 1 loss, which is the fastest way to kill any account.
With that in mind a stop loss of only 20 pips is very little almost every trade will go against you more than 20 pips before it moves in your favor, you need to give your trade some room to breathe. That's why I recommend to set bigger goals like 50 to 100 pips with a 50 - 100 pips SL. I always prefer 1:1 Win:Loss ratio.
To sum it up, trading the Forex market is not as easy as we all want it to be. It's risky it's surrounded by over-hyped products and deceiving marketers trying to get to your pocket every day. Just be careful never spend money on courses or EAs everything you need to learn is out there for free, Just take the time to Google it up.
Mohamed Rabea - Professional Forex Trader
http://www.forexfaqs.net/
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