Forex or Foreign Exchange Market, is the largest and most liquid market available in the world. More than one trillion dollars are traded on the Forex markets daily! This is an important concept to grasp. It is very possible to be making thousands of dollars on these markets, every day. Though this is not common for beginners and intermediate traders. At least not until you have a really good strategy that actually works.
Forex is a very volatile market. The risk is high. As with high risk, high volatility, and high liquidity comes large returns, or large losses if you have no strategy.
Here are some KEY components that need to be part of your strategy:
Risk
Risk is one of the most important skill sets to accomplish when you trade on the forex. You need to define how much risk are you willing to take in one trade. I DO NOT recommend that you ever trade at 100% risk. This means that if you fail once, you lost everything. If you trade at 50% risk or on a single trade you are using half your money, you can loose a trade and still keep going for another shot. You can keep going on on this. An absolute great risk percentage is 10%. This way you can lose a bunch of trades and still be able to continue on.Now that you have your risk down packed, just that alone will not make you riches.
Technical Analysis
You need to look at charts and read them. You need to look at technical formulas to see when you should enter a trade and exit a trade. There are many formulas out there, I would say to stick with the simplest ones. The complicated ones are usually too deep into analysis that its trying to predict chaos. Though it may get many right, when it does wrong it could be a large loss.
Define a Set of Rules
Just these two rules alone also will not make you rich. You need one last part of the puzzle. This last part is to have a defined set of rules. You need to stick by them, NO MATTER WHAT. What most people make a mistake on is that they try an analysis right and when they start loosing money, they switch to another analysis! Then the spiral starts. This is where you play until you loose, on and on until you have no money left. Keep your rules with you. You need to follow them, and believe in them.
The above is a lot to swallow. It will seem like you will be spending lots of time analyzing your charts. It will seem so at first, but you can adjust your time accordingly and it will make you money. If you are a beginner or you want a really fast and efficient way to do all of this I got something for you.
Forex is a very volatile market. The risk is high. As with high risk, high volatility, and high liquidity comes large returns, or large losses if you have no strategy.
Here are some KEY components that need to be part of your strategy:
- Risk
- Technical analysis
- Defined set of rules
Risk
Risk is one of the most important skill sets to accomplish when you trade on the forex. You need to define how much risk are you willing to take in one trade. I DO NOT recommend that you ever trade at 100% risk. This means that if you fail once, you lost everything. If you trade at 50% risk or on a single trade you are using half your money, you can loose a trade and still keep going for another shot. You can keep going on on this. An absolute great risk percentage is 10%. This way you can lose a bunch of trades and still be able to continue on.Now that you have your risk down packed, just that alone will not make you riches.
Technical Analysis
You need to look at charts and read them. You need to look at technical formulas to see when you should enter a trade and exit a trade. There are many formulas out there, I would say to stick with the simplest ones. The complicated ones are usually too deep into analysis that its trying to predict chaos. Though it may get many right, when it does wrong it could be a large loss.
Define a Set of Rules
Just these two rules alone also will not make you rich. You need one last part of the puzzle. This last part is to have a defined set of rules. You need to stick by them, NO MATTER WHAT. What most people make a mistake on is that they try an analysis right and when they start loosing money, they switch to another analysis! Then the spiral starts. This is where you play until you loose, on and on until you have no money left. Keep your rules with you. You need to follow them, and believe in them.
The above is a lot to swallow. It will seem like you will be spending lots of time analyzing your charts. It will seem so at first, but you can adjust your time accordingly and it will make you money. If you are a beginner or you want a really fast and efficient way to do all of this I got something for you.
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