Foreign exchange market (Forex, currency market or FX) is a global decentralized or over-the-counter (OTC) market for the trading of currencies. This market determines foreign exchange rates for every currency. It includes all aspects of buying, selling and exchanging currencies at current or determined prices. In terms of trading volume, it is by far the largest market in the world, followed by the Credit market. – Wikipedia
Forex is the biggest investment platform in the world that offers a global investment/trading opportunity to traders around the world. And the opportunities in forex are not limited or restricted; everyone has equal opportunity no matter where that person is. Thank God for internet.
Most Traders have expected to get rich quick from FX or at least for it to be their means of livelihood but these have not always been the case.
Foreign exchange market is actually a means of livelihood for some Traders and it has made a lot of Traders rich overnight. It will continue to be like this as long as the opportunity continues to exist. With these few forex awareness, you can become profitable trading on foreign exchange market online.
- If you want to become very good and profitable trading FX, you have to make up your mind that forex is for you and you are for it.
- Get the basic knowledge about forex. Do not complicate things here; forget about those bogus analyses. Those dishing out those analyses do not actually make good profit trading.
- Concentrate on price action and monitor live candles movements to master their formations.
- Demo trade only to get used to how your platform works and not to learn how to trade.
- Start learning how to trade with real money and don’t be afraid to lose your money in FX trading. It should be part of the price to pay to become a profitable Trader. Use any amount you can afford to lose to start learning to trade.
- Have a plan and develop a system that will guide your trading. Do not use what people are dishing out online except you confirm it’s working for you.
- Start with small equity depending on your level, risk higher at the beginning and reduce your risk accordingly as you become more profitable. This is not the normal norm as far as forex is concerned, but I have found that it works and I call it aggressive forex trading. For example, If you decided to start trading with $500.00; I will advise you make your 1 pip to equal 0.1 (i e, it will take you 5,000 pips to wipe out your equity) if you move the account to $2,000; I will advise you to make your 1 pip 0.2 (i e, it will now take 10,000 pips to wipe your account) You grow in that order. You can decide to be more aggressive, it all depends on your risk tolerance. Kindly note that excessive reduction of risk does not in fact helps a trader to become profitable or not to lose his or her money. What actual helps a trader remain profitable is trading with accurate knowledge of the market as well as trading without fear of losing money. Someone may start with $100,000.00 and reduce risk so low and still wipe out all the account and another person can start with only $200.00 and increases his risk and succeed in taking the account to over $100,000.00. You just have to know what you expect from the market. Please, ensure that you are not motivated by greed here if not, you will wipe your account no matter how big or small it is.
- Do not follow the trend foolishly for trend is not really your friend as you were told by the so called forex experts that are not making money trading. Let the trend only guide your decision making before entering any trade. Try and understand trends in all the time frames and bear in mind that trends in higher time frames may have more force than those of smaller time frames but your trading should be based on the situation on ground at the time of your analysis.
- If you are a Scalper, do not over trade and do not take revenge on the market. You can decide how many pips you want to make each day and once you make it you can close your trading for the day. And if you lose money, stop trade for that moment and understand what happened and learn from your loss.
- Always combine technical analysis with fundamentals. What I mean here is to watch out for important news that will make impact on the currencies you are trading and avoid trading at the time of release. But you can trade immediately after the release once you are good to go based on your system.