Forex Trading Mistakes

The smallest mistake or miscalculation can end up resulting in either a massive gain or a horrible loss when it comes to currency trading. The experts will all attest that though there are several books and strategies on the currency market there is always going to be the unexpected. So how can we avoid ourselves from making costly mistakes when Forex Trading.

So we will explore the major mistakes and give some helpful information on how to avoid these situations in the future. The major mistakes that most beginner forex traders will make is when there is too much capital but too little chance of making profit. With a small account balance backed by hope that things will be in your favour, you can just as easily lose more than you can afford to. This market is, as you should know by now, not ruled by emotions or luck, although there are rare instances wherein others do strike a gold mine.

Remember when it comes to forex trading a golden rule is not to take a gamble, but a calculated risk instead. We should only trade when the odds are in our favor.

The biggest mistake a Forex Trader can make is over trading, thinking that they have to continually trade. Most beginner traders will wrongly assume that the outcome of a trade can entice them to invest too much of their capital and then losing it all in one trade. This can also result in them becoming in debt.

Failing to plan the trade can result in poor execution and major losses. Before you begin to trade you must make sure that you have plan- then trade the plan without a plan you are planning to fail without knowing it. You also must understand what sort of trader you are, short term, medium term or long term whatever you decide to be stick to your rules and trading plan.

The fastest way to become a successful trader is learning, and in most cases learning from other peoples mistakes. In order to do this you must be prepared to educate yourself to become a better trader.

Understanding the Basics of Forex Trading

Forex trading or Foreign Exchange Trading refers to the simultaneous trading—that is, buying and selling—of two different currencies. It is done between and among major financial institutions, central banks, small retail currency traders or speculators, large international companies, government institutions, companies with overseas operations and the like. Based on the amount of money being traded, the international forex trading market is the world’s biggest financial market. Everyday, forex trading market gets an average revenue of $US 1 trillion—an amount far greater than the total revenues produced by all the stock and bond markets in the world. Characteristics Forex trading is a kind of over-the-counter trading—it occurs directly between to financial institutions or currency traders. The trading markets may be interconnected but there is no single unified market. Hence, there is also no single or standard rate. Each rate or price depends on what is being traded. However, the traders traditionally use nearly similar rates. Another characteristic of a forex trading is that it operates 24 hours; thus, one can trade any time of the day. Also, there is no need of an exchange floor, it operates through a global electronic network where trading occurs over the telephone and computer networks. This characteristic also prevents delays that consume a lot of time. Forex trading market is also very competitive and is highly liquid. This allows the parties to get low dealing costs and better price. Top Currency Traders and Major Currencies Traded Wall Street Journal Europe says ten major currencies account for 73 percent of the total forex trading volume. Among them are Deutsche Bank, UBS, Citigroup, HSBC, Barclays, Merrill Lynch, J.P. Morgan Chase, Goldman Sachs, ABN Amro, and Morgan Stanley. Among the currencies mostly traded are the US, Canadian, and Australian dollars; Euro; Yen; and Swiss Franc. A study conducted by the Bank for International Settlements says that the most traded products are Euro/USD, USD/JPY, and GBP/USD. The study noted that in spite euro’s continuous growth, forex trading market remains to be concentrated in dollars. The Trade Trade happens when you accept the offered price and when the dealer confirms. Exchange floor is no longer required, as mentioned earlier. In every trade, two currencies are always involved and the currencies traded serve as the products traded. Each currency has a price expressed in another currency such as 1 euro is equivalent to 1.204 dollar. In the said example, the euro trader sells the euro and buys the dollar. There are no further costs in the trade. There are no commissions and other fees as well. Large multinational companies engage in forex trading when they are buying from and selling goods to other countries. However, this kind of forex trading encompass only a small portion of he daily activities in the foreign exchange market. Most of the trading activities are carried out by currency speculators who earn from the changes in value of a particular currency. Key players in the Market BIS study shows that more than 50%of the forex trading transactions are interbank transactions. Trading revenues of most commercial establishments and currency speculators are deposited in the bank. Central banks also play a big role in the forex trading market. These banks control the supply of money, interest, inflation and target rates in order to stabilize the forex trading market.

FOREX Beats the Stock Market

A comparison of investing in the FOREX exchange or the stock market.

Companies issue stocks to raise capital for expansion, equipment and other projects. Stocks have been a very popular form of investment for years. Each share of a stock a person owns represents a small ownership of the company. Stock values fluctuate based on the fortunes of the company. When the company is doing well the stock price will increase, at this time the investor can sell their stock to capture the profit or they can continue to hold it in hopes of greater profits in the future. Some companies will pay dividends on stocks; dividends are a small share of the profit per each share of stock.

To buy and sell stocks you must use a broker and go through one of the stock exchanges. In the US there are two exchanges, the New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotation System (NASDAQ). Some very large companies may have stocks on multiple exchanges but most companies will sell their stocks on one or the other. Until recently the stock market was seen as a long-term investment strategy. Most portfolios would have a large number of "Blue Chip" stocks. These are stocks that have proven their value over a long period of time. With the addition of internet trading we are seeing what is typically known as day trading. Day traders attempt to take advantage of the daily fluctuations in the market by making multiple trades during the day. This is a fairly high-risk method of investment and is further hindered by the large number of commissions charged for each transaction. In some cases stocks can be bought on margin. In the stock exchange your margin rates are usually about 50%, which means you need half the cost of the stock to be able to buy it.

FOREX The FOREX exchange is significantly different than the stock exchange. On the FOREX exchange almost all trades are short-term trades, in fact a trader may only hold a currency for a few minutes before moving it again. Since there are no brokers fees in the FOREX exchange you can make numerous trades in one day without racking up large commission fees. With over $1.5 trillion in trades every day the FOREX exchange is the largest financial market in the world. To put this in perspective all of the American stock markets combined only handle about $100 billion worth of trades a day. This huge volume causes the FOREX exchange to be the most fluid market in the world. Because so much of the world economy is dependent on moving currency from country to country there is always a buyer and a seller for every currency combination. The stock market on the other hand is not nearly as liquid, you may not always find a buyer for the stock you want to sell or a seller for the stock you want to buy.

The FOREX market is not located in a single place but is worldwide. Due to time zone changes the FOREX market is open 24 hours a day 5 days a week. Stock exchanges are normally only open for 7 hours a day, you can not buy or sell a stock if the exchange that it is listed on is closed at the time. FOREX is more predictable than the stock market as well. It follows well-defined patterns, you can also leverage better in FOREX than the stock market. Margin accounts in FOREX run as high as 100:1 which means you only need $1 to buy $100 worth of currency.

3 Simple Guidelines to Boost Forex Profits

FOREX trading can be risky, and there is potential for big losses as well as huge gains. Proper and educated guidance regarding FOREX trading is vital. Follow these 3 steps to boost FOREX trading profitably.

FOREX trading is nothing more than direct access trading of different types of foreign currencies. In the past, foreign exchange trading was mostly limited to large banks and institutional traders. Recent technological advancements have made it so that small traders can also take advantage of the many benefits of FOREX trading by using the various online trading platforms. FOREX markets possess unique attributes that offer unmatched potential for profitable trading in any market or any stage of the business cycle. For starters, FOREX trading boasts a 24-hour market, giving traders the chance to take advantage of profitable market conditions anytime. Secondly, the FOREX market is the most liquid market in the world. FOREX traders can enter or exit the market whenever they want, during almost any market condition. There also exist minimal execution barriers or risk and no daily trading limits. For all the advantages of the FOREX market, one glaring weakness emerges. The FOREX market is seen as unregulated although the operations of major dealers, like commercial banks in money centers, are regulated under the banking laws.

The daily operations of retail FOREX brokerages are not regulated under any laws or regulations specific to the FOREX market. Many of these types of establishments in the United States, don't even report to the I.R.S. To make the most of the explosive potential of successful FOREX trading, individuals should follow these guidelines. 1.Determine the quality of the broker institution you choose. Unlike equity brokers, FOREX brokers are usually attached to large banks or lending institutions because of the large amounts of capital that is required.

FOREX brokers should be registered with the Futures Commission Merchant (FCM) as well as regulated by the Commodity Future Trading Commission (CFTC) 2. Request a free trial. Before you commit to any broker, be sure to request free trials so that you can test their different trading platforms. Brokers usually provide technical as well as fundamental commentaries, economic calendars and other research as a means of assisting you. Basically, a quality broker will provide everything one needs to succeed. 3.Monitor two financial meetings to provide insight into the upcoming FOREX market.

Two important meetings FOREX traders should watch for are the federal Open Market Committee and the Humphrey Hawkins Hearings. By reading the reports and examining the commentary, FOREX fundamental analysts can get a better understanding of any and all long-term market trends it also allows short-term traders to be able to profit from extraordinary happenings.

Some helpful tips for Forex trading

For someone who wants to get into the world of trade, forex trading is quite possibly the greatest way to approach a career in the field. Forex has shown that it is one of the biggest markets for trade around the globe with an average of 2 trillion dollars being moved on a daily basis. Someone with a desire for trading can really hit the numbers with forex trading. However, the forex game is not just about jumping in and hoping for fat pockets. There are many aspects that determine your prosperity in forex trading. Forex training will help you be prepared to play the currency market and avoid the common mistakes that many people make. In terms of forex training, there are many mentors available for you. However, not many of them are in accordance with the context. If you are new to the forex trading game as well as the Internet itself, then it might be difficult for you to find the right forex training program. If you fit this category, then consider your options: Choose a forex training program that attacks the forex trading fundamentals from the ground up. Fundamentals are useful for one to maintain a strong position in the market. Certain fundamental concepts should be kept in mind such as rollover, margin, bidding, order types, etc. Maintaining a solid comprehension about the basics of forex can assist you in managing all of your deeds without worry. Besides fundamentals, one should also know about the mistakes that can easily be made by forex traders who are jumping into the market. A solid forex training program will be able to inform students of all the possible mistakes that can be made when trading in forex market. As soon as you know how to avoid these certain mistakes, you will have more confidence with your approach to forex trading. When you do decide to check out a training course, make sure that you find one that is organized by a credible authority so that you can be certain that you will be able to avoid the common mistakes that many traders make. Learn about making easy money from home with currency exchange using FOREX INVESTING.

Forex Trading Training

I know that it can be hard if you are a beginner in the forex market.

There is so much information that you are going to need to learn and become aware of that sometimes it can become overwhelming and also stressful, that is why I am going to give you a few tips on how you can go about making sure that you get the proper forex trading training that you need. There are many courses out there on the market today that you can choose from that will help you with your forex trading training, that is why it is important that you get online and take a look at some of those courses so that you will be able to be a successful trader at the forex market. If you are a beginner in the forex market, a forex trading training course should be one of the very first things that you look forward before you take the steps into the forex market. If you choose a forex trading training course you will be able to learn the fundamental as well as the basics of the subject of forex trading as well as the forex market because that is what a forex trading training course is all about.

Popular Forex Trading Training Courses

Since I know that you are probably a beginner, I am going to tell you a little about some popular forex trading training courses so that you will be able to choose one that may be right for you and your style of trading. When you are selecting a forex trading training course make sure that you find one that is going to be bubbling with information that you need because you need to learn as much as you can. The first forex trading training course that I am going to tell you about is the 4x Apprentice. This is a forex trading training course that is based online and is especially designed just for beginners in the forex market. The actual course takes about two weeks to cover, but you are able to learn at your vary own pace so that is a good factor to know. You will also be able to talk with real forex professionals live and you will also be able to talk to other students in the student discussion forum that is also offered. One thing that many of the students enjoy is the fact that you are able to have post graduation access which actually allows you to talk with your instructors and also ask questions in the forums even after you have finished the forex trading training online course. This course will cost you about one hundred and forty nine dollars.

Forex Trading Training Online

In this paragraph, I am going to tell you about another course that you may be interested in which is known as the Ultimate Traders Package and is also written by Market Traders which is an Institute. This system is known as more comprehensive as well as interactive trading course that is currently available. You will find that the system also teaches you about a number of different mediums which includes what is known as live online mentoring as well as training modules and also a forex trading class that is offered on site. However, you will be paying a pretty penny to take this course because of the fact that it will cost you around thirty five hundred dollars. If you are not sure that this course is right for you then I recommend that you take the time to continue your search to find the right one. Some of the courses are going to be expensive but if you have the money to spare they are sometimes worth it however, not everyone is that fortunate so they have to look for other ways which also consist of good courses as well. Just because a course doesn’t cost as much as another one does, it doesn’t mean that it is not a good course to take. However, you are going to want to make sure that you take the time to find a course that is going to give you the opportunity to learn everything that you need to know as well as everything that you want to know. If you want to be a successful trader and you want to learn, the more information that you are able to study the better off you will be in the long run.

Planning Forex trading strategies

Forex trading strategies are based on fundamental and technical types of analysis. This article gives you a better understanding of both types and ways of implementing them into your Forex trading strategies.

FUNDAMENTAL ANALYSIS

Political and economic changes are the basis here as they frequently affect currency prices. Traders relying on this analysis gather information about unemployment forecasts, political ideologies, economic policies, inflation and growth rates from news sources. Most traders combine Forex trading strategies to plot actual entrance and exit points and double-check the information.

Forex trading strategies consider that just like most markets the market is controlled by supply and demand. The two most critical affecting factors for them are interest rates and the strength of the economy that is affected by changes in the GDP, trade balances and the amount of foreign investment.

There are many indicators released by government and academic sources on a weekly or monthly basis. The most important and commonly followed are: interest rates, international trade, CPI, durable goods orders, PPI, PMI and retail orders. These are pretty reliable measures of economic health and are closely followed by all traders that rely on fundamental analysis while mapping out their Forex trading strategies.

Interest rates can strengthen or weaken the currency. In some cases high interest rates attract foreign money, however high interest rates frequently cause stock market investors to sell off their portfolios. They do so believing that the higher cost of borrowing money will adversely affect many companies. If enough investors sell off their holdings it can cause a downturn in the market and negatively affect the economy. Which of these two effects will take place, depends on many complex factors. Usually economic observers agree on how the current change in interest rates will affect the general economy and currency prices.

International Trade. If there is a trade deficit, it is usually considered a negative indicator, as more money is leaving the country than entering it. This can have a devaluing effect on the currency, but usually trade imbalances are already factored into the market consideration. If a country normally operates with a trade deficit, currency price should be unaffected. It will change if the deficit is greater than expected.

The cost of living (CPI) and the cost of producing goods (PPI) are important indicators as well. You should also watch the GDP (the value of all the goods produced in the country) and the M2 Money Supply which measures the total amount of currency for a country.

In the US alone there are 28 major indicators that have a strong effect on the financial market and should be closely watched. This information can be found on the Internet and is provided by many brokers. Use it for working out your Forex trading strategies.

Technical analysis

It is based on the following assumptions:

1. Combined market forces (political events, economic conditions, seasonal fluctuations, supply and demand) cause currency price movements considered in Forex trading strategies.

2. Currency prices on the Forex market follow trends. Predictable consequences have been linked with many recognized market patterns.

3. Forex trading strategies can rely on historical trends to predict current price movements. Forex market data has been collected for the last 100 years, over that time certain patterns have become emergent. Human psychology and the way people react to certain circumstances are the basis of these patterns.

Most traders consider technical analysis to be of critical importance even though they may also use fundamental analysis to support and confirm their Forex trading strategies. Unlike fundamental analysis, technical analysis can be applied to many currencies and markets at the same time. Since fundamental analysis requires detailed knowledge of the economic and political conditions of a certain country, it is nearly impossible for any single trader to perform it properly on more than a few countries.

Forex beginners may consider the complexities of technical analysis overwhelming and even unnecessary but if you wish to ensure the success of your Forex trading strategies do not ignore both analysis types.

Any quality online Forex broker should be able to supply you with a large variety of online charts for technical analysis. Working out your Forex trading strategies, you can purchase in-depth professional charts, there is usually a monthly fee involved in gaining access to this information. There is also free software available to help you with charting. Good charts are updated in real time.

Mapping out your Forex trading strategies, you should learn the market and study trends before you begin active trading. Most brokers will provide you with a practice account where you can place "paper trades" - practice trades where no real money is made or lost. But they act just like a real trade, so you can see exactly how your trade would have turned out if you had placed it for real. This allows you to become familiar with your broker's system as well as learning about the market without risking any money.

The second part of this article explores various charts and indicators you need to use while planning your unique Forex trading strategies.

Understanding Forex Quotes

Reading a foreign exchange quote may seem a bit confusing at first. However, it's really quite simple if you remember two things: 1) The first currency listed first is the base currency and 2) the value of the base currency is always 1. The US dollar is the centerpiece of the Forex market and is normally considered the 'base' currency for quotes.

In the "Majors", this includes USD/JPY, USD/CHF and USD/CAD. For these currencies and many others, quotes are expressed as a unit of $1 USD per the second currency quoted in the pair. For example, a quote of USD/JPY 110.01 means that one U.S. dollar is equal to 110.01 Japanese yen. When the U.S. dollar is the base unit and a currency quote goes up, it means the dollar has appreciated in value and the other currency has weakened. If the USD/JPY quote we previously mentioned increases to 113.01, the dollar is stronger because it will now buy more yen than before.The three exceptions to this rule are the British pound (GBP), the Australian dollar (AUD) and the Euro (EUR). In these cases, you might see a quote such as GBP/USD 1.7366, meaning that one British pound equals 1.7366 U.S. dollars. In these three currency pairs, where the U.S. dollar is not the base rate, a rising quote means a weakening dollar, as it now takes more U.S. dollars to equal one pound, euro or Australian dollar.In other words, if a currency quote goes higher, that increases the value of the base currency.

A lower quote means the base currency is weakening. Currency pairs that do not involve the U.S. dollar are called cross currencies, but the premise is the same. For example, a quote of EUR/JPY 127.95 signifies that one Euro is equal to 127.95 Japanese yen. When trading forex you will often see a two-sided quote, consisting of a 'bid' and 'offer'. The 'bid' is the price at which you can sell the base currency (at the same time buying the counter currency). The 'ask' is the price at which you can buy the base currency (at the same time selling the counter currency).

Forex Foreign Exchange Market

n the following article, I would like to tell you about the forex foreign exchange market and what your future may be in this market if you decide to be a trader in this market. There is a lot of information about the forex foreign exchange market out there if you are willing to take the time to learn about it and I hope that you will because you are going to need to have a really good background of knowledge when it comes to trading in the forex foreign exchange market. However, don’t feel like you are pressured to learn all the information that you are provided with because you don’t have to, you just needs to know that there is a different style of trading and that there are different opportunities out there for you if you are willing to become a part of the forex traders.

The Basics of the Forex Foreign Exchange Market

One thing is for certain and that is that you are going to need to know the basics that are behind the forex market. First, you should know that the word forex is a short version of the foreign exchange and the forex market is known as the largest market of finances that is in the world. This market is different than the other markets because of the fact that it is open for twenty four hours a day and it is open six days a week for your convenience. You should also know that the forex market isn’t like any other market because of the fact that it doesn’t actually have a fixed exchange. In this market there are a lot of people and companies that participate in forex trading. For instance, you have the major banks as well as the brokers and also the financial institutions and also private individuals as well. There are many opportunities in the forex foreign exchange market and I will tell you about them in the next paragraph.

Forex Foreign Exchange Market and the Trading Opportunities

Due to the fact that there are so many different currencies that are actually traded in the forex market, the forex market is able to provide the different traders with what is known as an extreme level of volatility as well as the volume which takes place on a day to day basis, which in turn gives them the opportunity to make profit in a number of ways. Forex is also the system that actually allows the individual traders to actually be able to profit from the markets whether they are rising or falling and there are many tools that you can use as a trader to actually manage the risk. Forex also allows the ability to trade with even small margins requirements that are used as high levels of leverage and that are normally offered by a forex broker to the trader of the forex.

Forex Foreign Exchange Market and Margin Requirements

In case you don’t already know, currencies are allowed to be traded based on the margin. What this means in term is that you can make normal use of the leverage to your advantage when you are trading. You will find that the actual requirements seem to vary among the brokers but it normally stays in a range from one to four percent. So, if your broker requests one percent that means that you will have to give them one percent of your initial deposit. Now let’s take a look at the buying as well as the selling of the trades. When you are looking at a currency chart you will notice that the trades are always quoted in pairs and this will tell you what one currency is worth when it is transformed into another currency. Keep in mind that the only time that you are going to want to place a trade is when you think that one currency will be increasing in relation to the one that you are selling. If you are right and the currency does increase you will be able to lock in the profit. When it comes to your ability to be a sharp trader you need to make sure that you are able to watch the trades and see how the system works so that you will be able to form a conclusion based on the information that you have been given. If you are able to be correct about the movements in the market, you will be shocked at how much you can do.

Try Mini Forex account at first level

Because forex trading is such a complicated business, there are many systems in place to help new or cautious traders get involved without going bankrupt. There are mini accounts that let you invest only small amounts of money, and there are even automated accounts that let a computer program do it all for you. And in between those extremes is the managed forex account, which gives you full access to the market but gives you an adviser to help you navigate it.

A managed forex account is perfect for someone with no experience, or limited experience, in the forex market. It’s also good for someone who wants to invest but doesn’t want to go through all the studying and training necessary to do a good job of it himself. Furthermore, a managed account is a godsend if you want to invest but simply don’t have the time or the inclination to watch the market 24 hours a day.

Managed accounts always require a minimum investment of at least $10,000, and some have the minimum set as high as $250,000. This makes it off-limits to many individuals, especially considering you never want to invest more than you can afford to lose. It is mostly businesses and corporations that use managed accounts, though more and more well-heeled individuals are taking advantage of it in the 21st century.

The reason for the high minimum investment is that a managed account has to have someone managing it -- an actual human being, that is, not a computer program. If the minimum investment were more reasonable, too many people would want managed accounts, and the managers wouldn’t be able to handle their client load.

In general, a managed account is best for long-term investors. Someone wanting to get into the forex market, make a lot of money through aggressive, risky ventures, then get out again, would not benefit from a managed account. Most managers favor a conservative, slow-growth strategy, usually suggesting that investors stay with the program for two years to show real profits. (Most systems let you withdraw your money and quit whenever you want, though, with no penalties for doing so.)

There is a fee for managed accounts, of course; nothing comes for free. Usually the fee is based on the performance of the market, with the manager taking a percentage of your net profits each quarter. This fee is well worth it for many individuals, though, as they find a managed account gives them peace of mind with regard to where their money is being invested and what kind of return it’s yielding them.

Want to learn Forex ? There are lots of ways.

It isn’t hard to learn forex, but it does take time and dedication. The principles involved are fairly easy from a mathematical standpoint, and the basic way that the system works is straightforward enough once it’s been explained to you. But the details and nuances of the market can make it daunting.

The first step as you set out to learn forex should be to do some basic reading on how the foreign exchange market works. The foreign exchange Wikipedia article is good basic reading, and there are plenty of Web sites that offer overviews to help you learn the fundamentals.

Plenty of books have been written on the topic, some of which will help you and some of which just want your money. Try the public library first: Books are free, and if they’re in the library, they were probably published by legitimate publishing houses with legitimate editors and researchers. The information will be more reliable than something you get from a Web site where a guy wants you to buy his e-book.

After that, you have a number of options, all of which will help in different ways. You can make your choice depending on what your own learning process is usually like, whether you’re a visual learner or prefer written instruction, for example.

There are many forex seminars held in major cities, sometimes for free. In these, experienced traders offer tips and strategies to new traders trying to learn forex for the first time.

There are also online courses available, which you can take at your own pace over the course of several weeks. These almost always cost money, and the quality varies. (Remember, you usually get what you pay for.) Some of these courses come from brokers who want you to learn the system so you can start trading with their companies, so it’s in their own best interest to train you well.

You should also consider a demo account, which can help you practice through a realistic simulation of currency trading. You get the full experience of trading without any of the financial risk.

Many firms also offer mini forex accounts, which are real accounts with real money, only with much smaller amounts. For example, instead of a minimum starting investment of $1,000, the minimum might be only $100. This lets you learn forex through actual hands-on practice, but with a risk that is much smaller than usual. You can quickly see if you’re cut out for trading or if it’s just not in your constitution to handle the emotional roller coaster.

Once you learn, forex can be fun and exciting, not to mention financially lucrative. It is necessary to learn, though, and not just jump in blindly.

Good Forex trading strategy can make a difference

No sane person would jump into the forex market blindly. You might as well set your money on fire if that’s what you’re going to do. Sensible investors study the market carefully first, learn the ins and outs of currency trading -- and even then, before they launch into it, they devise a smart forex trading strategy.

The market is constantly changing and is not always predictable, true. But you still need a strategy, one that allows for unknowns and surprises.Your strategy should begin with how much money you can afford to lose. That may sound like a negative outlook -- after all, the goal is to MAKE money, not lose it -- but common sense tells you that the forex market is a gamble. There are precautions you can take that will make you less likely to lose your initial investment, but there’s no way to guarantee it. Your strategy must allow for the possibility that you’ll take a bath, and for that reason you should never invest more than you can afford to lose.

Another good tip for your trading strategy is to avoid putting all your investments in one currency. What’s the old saying about eggs and baskets? Yeah, don’t put ‘em all in one. Spreading them out makes it much, much less likely that you’ll be wiped out, the way you would if you relied on one currency and it bottomed out.

As you prepare your trading strategy, make yourself aware of what the market is doing right now. Is it trending upward, or downward? What’s the general mood among traders? They all have a strategy, too, and are eager to know what others are thinking.

Consider also what your timeline is. How long do you want to stay in the market before taking your profits and getting out?

Your strategy must also involve learning the timing of the business. Timing is everything: Too late or too early and your potential profit evaporates. As you learn to gauge the market and make trades at just the right time, your profits will increase. A good strategy will factor in this learning curve and allow for a few mistakes at first.

Above all, to prepared to accept surprises when it comes to forex trading. Strategy can only get you so far. The rest is ingenuity and a little bit of luck.